Correlation Between Morgan Stanley and Asiabest Group
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Asiabest Group 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 Asiabest Group 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 Asiabest Group International, you can compare the effects of market volatilities on Morgan Stanley and Asiabest Group 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 Asiabest Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Asiabest Group.
Diversification Opportunities for Morgan Stanley and Asiabest Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and Asiabest is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Asiabest Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiabest Group Inter 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 Asiabest Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiabest Group Inter has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Asiabest Group go up and down completely randomly.
Pair Corralation between Morgan Stanley and Asiabest Group
Given the investment horizon of 90 days Morgan Stanley is expected to generate 129.88 times less return on investment than Asiabest Group. But when comparing it to its historical volatility, Morgan Stanley Direct is 5.2 times less risky than Asiabest Group. It trades about 0.01 of its potential returns per unit of risk. Asiabest Group International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Asiabest Group International on September 24, 2024 and sell it today you would earn a total of 2,220 from holding Asiabest Group International or generate 555.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 61.45% |
Values | Daily Returns |
Morgan Stanley Direct vs. Asiabest Group International
Performance |
Timeline |
Morgan Stanley Direct |
Asiabest Group Inter |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
Morgan Stanley and Asiabest Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Asiabest Group
The main advantage of trading using opposite Morgan Stanley and Asiabest Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Asiabest Group 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 Asiabest Group will offset losses from the drop in Asiabest Group's long position.Morgan Stanley vs. Uranium Energy Corp | Morgan Stanley vs. Alaska Air Group | Morgan Stanley vs. Coursera | Morgan Stanley vs. Four Seasons Education |
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Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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