Correlation Between Morgan Stanley and Argosy Research

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

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

Diversification Opportunities for Morgan Stanley and Argosy Research

0.25

Correlation Coefficient

Morgan Stanley  Argosy Research

Modest diversification

The 3 months correlation between Morgan and Argosy is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Argosy Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argosy Research 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 Direct are associated (or correlated) with Argosy Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argosy Research has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Argosy Research go up and down completely randomly.

Pair Corralation between Morgan Stanley and Argosy Research

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.56 times more return on investment than Argosy Research. However, Morgan Stanley Direct is 1.78 times less risky than Argosy Research. It trades about -0.04 of its potential returns per unit of risk. Argosy Research is currently generating about -0.21 per unit of risk. If you would invest  2,068  in Morgan Stanley Direct on October 14, 2024 and sell it today you would lose (16.00) from holding Morgan Stanley Direct or give up 0.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Morgan Stanley Direct  vs.  Argosy Research

Morgan Stanley Direct

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Morgan Stanley is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Argosy Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argosy Research has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Argosy Research is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Morgan Stanley and Argosy Research

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

The idea behind Morgan Stanley Direct and Argosy Research 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 Commodity Directory module to find actively traded commodities issued by global exchanges.