Correlation Between Morgan Stanley and Indara Insurance

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

Diversification Opportunities for Morgan Stanley and Indara Insurance

-0.78

Correlation Coefficient

Morgan Stanley  Indara Insurance

Pay attention - limited upside

The 3 months correlation between Morgan and Indara is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance Public 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 Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Indara Insurance go up and down completely randomly.

Pair Corralation between Morgan Stanley and Indara Insurance

Given the investment horizon of 90 days Morgan Stanley is expected to generate 55.79 times less return on investment than Indara Insurance. But when comparing it to its historical volatility, Morgan Stanley Direct is 38.09 times less risky than Indara Insurance. It trades about 0.04 of its potential returns per unit of risk. Indara Insurance Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11,500  in Indara Insurance Public on September 14, 2024 and sell it today you would lose (3,600) from holding Indara Insurance Public or give up 31.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.26%
Values	Daily Returns

Morgan Stanley Direct  vs.  Indara Insurance Public

Morgan Stanley Direct

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Indara Insurance Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indara Insurance Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Morgan Stanley and Indara Insurance

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

The idea behind Morgan Stanley Direct and Indara Insurance Public 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.