Correlation Between Morgan Stanley and Blackstone

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Morgan Stanley and Blackstone Group, you can compare the effects of market volatilities on Morgan Stanley and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Blackstone.

Diversification Opportunities for Morgan Stanley and Blackstone

0.73

Correlation Coefficient

Morgan Stanley  Blackstone

Poor diversification

The 3 months correlation between Morgan and Blackstone is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Blackstone go up and down completely randomly.

Pair Corralation between Morgan Stanley and Blackstone

Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.97 times more return on investment than Blackstone. However, Morgan Stanley is 1.03 times less risky than Blackstone. It trades about -0.05 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.15 per unit of risk. If you would invest  12,492  in Morgan Stanley on December 28, 2024 and sell it today you would lose (959.00) from holding Morgan Stanley or give up 7.68% of portfolio value over 90 days.

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

Morgan Stanley  vs.  Blackstone Group

Morgan Stanley

Risk-Adjusted Performance

Very Weak

Over the last 90 days Morgan Stanley has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Blackstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Morgan Stanley and Blackstone

The main advantage of trading using opposite Morgan Stanley and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.

The idea behind Morgan Stanley and Blackstone Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.