Correlation Between Morgan Stanley and AlphaVest Acquisition

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and AlphaVest Acquisition at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Morgan Stanley and AlphaVest Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Morgan Stanley and AlphaVest Acquisition Corp, you can compare the effects of market volatilities on Morgan Stanley and AlphaVest Acquisition and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Morgan Stanley with a short position of AlphaVest Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and AlphaVest Acquisition.

Diversification Opportunities for Morgan Stanley and AlphaVest Acquisition

0.64

Correlation Coefficient

Morgan Stanley  AlphaVest Acquisition

Poor diversification

The 3 months correlation between Morgan and AlphaVest is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and AlphaVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaVest Acquisition and Morgan Stanley is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Morgan Stanley are associated (or correlated) with AlphaVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaVest Acquisition has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and AlphaVest Acquisition go up and down completely randomly.

Pair Corralation between Morgan Stanley and AlphaVest Acquisition

Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 1.03 times less return on investment than AlphaVest Acquisition. In addition to that, Morgan Stanley is 2.81 times more volatile than AlphaVest Acquisition Corp. It trades about 0.02 of its total potential returns per unit of risk. AlphaVest Acquisition Corp is currently generating about 0.05 per unit of volatility. If you would invest  1,131  in AlphaVest Acquisition Corp on December 3, 2024 and sell it today you would earn a total of  20.00  from holding AlphaVest Acquisition Corp or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Morgan Stanley  vs.  AlphaVest Acquisition Corp

Morgan Stanley

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

AlphaVest Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaVest Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AlphaVest Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Morgan Stanley and AlphaVest Acquisition

The main advantage of trading using opposite Morgan Stanley and AlphaVest Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, AlphaVest Acquisition can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AlphaVest Acquisition will offset losses from the drop in AlphaVest Acquisition's long position.

The idea behind Morgan Stanley and AlphaVest Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.