Correlation Between Morgan Stanley and Glucose Health

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

Diversification Opportunities for Morgan Stanley and Glucose Health

0.12

Correlation Coefficient

Morgan Stanley  Glucose Health

Average diversification

The 3 months correlation between Morgan and Glucose is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Glucose Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glucose Health 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 Glucose Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glucose Health has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Glucose Health go up and down completely randomly.

Pair Corralation between Morgan Stanley and Glucose Health

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.08 times more return on investment than Glucose Health. However, Morgan Stanley Direct is 12.75 times less risky than Glucose Health. It trades about -0.15 of its potential returns per unit of risk. Glucose Health is currently generating about -0.02 per unit of risk. If you would invest  2,099  in Morgan Stanley Direct on December 4, 2024 and sell it today you would lose (58.00) from holding Morgan Stanley Direct or give up 2.76% of portfolio value over 90 days.

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

Morgan Stanley Direct  vs.  Glucose Health

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.

Glucose Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glucose Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Morgan Stanley and Glucose Health

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

The idea behind Morgan Stanley Direct and Glucose Health 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.