Correlation Between Morgan Stanley and Long An
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Long An 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 Long An 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 Long An Food, you can compare the effects of market volatilities on Morgan Stanley and Long An 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 Long An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Long An.
Diversification Opportunities for Morgan Stanley and Long An
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Long is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Long An Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long An Food 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 Long An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long An Food has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Long An go up and down completely randomly.
Pair Corralation between Morgan Stanley and Long An
Given the investment horizon of 90 days Morgan Stanley is expected to generate 41.24 times less return on investment than Long An. But when comparing it to its historical volatility, Morgan Stanley Direct is 2.46 times less risky than Long An. It trades about 0.01 of its potential returns per unit of risk. Long An Food is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,696,749 in Long An Food on December 27, 2024 and sell it today you would earn a total of 223,251 from holding Long An Food or generate 13.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 93.44% |
Values | Daily Returns |
Morgan Stanley Direct vs. Long An Food
Performance |
Timeline |
Morgan Stanley Direct |
Long An Food |
Morgan Stanley and Long An Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Long An
The main advantage of trading using opposite Morgan Stanley and Long An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Long An 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 Long An will offset losses from the drop in Long An's long position.Morgan Stanley vs. NETGEAR | Morgan Stanley vs. Jerash Holdings | Morgan Stanley vs. AYRO Inc | Morgan Stanley vs. Mediaco Holding |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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