Correlation Between Morgan Stanley and Solowin Holdings

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

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

Diversification Opportunities for Morgan Stanley and Solowin Holdings

-0.3

Correlation Coefficient

Morgan Stanley  Solowin Holdings

Very good diversification

The 3 months correlation between Morgan and Solowin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Solowin Holdings Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solowin Holdings Ordinary 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 Solowin Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solowin Holdings Ordinary has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Solowin Holdings go up and down completely randomly.

Pair Corralation between Morgan Stanley and Solowin Holdings

Allowing for the 90-day total investment horizon Morgan Stanley is expected to under-perform the Solowin Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Morgan Stanley is 3.82 times less risky than Solowin Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Solowin Holdings Ordinary is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  144.00  in Solowin Holdings Ordinary on December 28, 2024 and sell it today you would earn a total of  27.00  from holding Solowin Holdings Ordinary or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Morgan Stanley  vs.  Solowin Holdings Ordinary

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 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.

Solowin Holdings Ordinary

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Solowin Holdings Ordinary are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Solowin Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Morgan Stanley and Solowin Holdings

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

The idea behind Morgan Stanley and Solowin Holdings Ordinary 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.