Correlation Between Morgan Stanley and MD Pictures

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and MD Pictures 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 MD Pictures 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 MD Pictures Tbk, you can compare the effects of market volatilities on Morgan Stanley and MD Pictures 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 MD Pictures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and MD Pictures.

Diversification Opportunities for Morgan Stanley and MD Pictures

0.45

Correlation Coefficient

Morgan Stanley  MD Pictures

Very weak diversification

The 3 months correlation between Morgan and FILM is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and MD Pictures Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MD Pictures Tbk 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 MD Pictures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MD Pictures Tbk has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and MD Pictures go up and down completely randomly.

Pair Corralation between Morgan Stanley and MD Pictures

Given the investment horizon of 90 days Morgan Stanley Direct is expected to under-perform the MD Pictures. But the stock apears to be less risky and, when comparing its historical volatility, Morgan Stanley Direct is 3.24 times less risky than MD Pictures. The stock trades about -0.06 of its potential returns per unit of risk. The MD Pictures Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  358,000  in MD Pictures Tbk on December 4, 2024 and sell it today you would earn a total of  1,000.00  from holding MD Pictures Tbk or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

Morgan Stanley Direct  vs.  MD Pictures Tbk

Morgan Stanley Direct

Risk-Adjusted Performance

Very Weak

Over the last 90 days Morgan Stanley Direct has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Morgan Stanley is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

MD Pictures Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MD Pictures Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, MD Pictures is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Morgan Stanley and MD Pictures

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

The idea behind Morgan Stanley Direct and MD Pictures Tbk 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.