Correlation Between Morgan Stanley and GMK Norilskiy

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

Diversification Opportunities for Morgan Stanley and GMK Norilskiy

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Morgan and GMK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and GMK Norilskiy Nikel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMK Norilskiy Nikel 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 GMK Norilskiy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMK Norilskiy Nikel has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and GMK Norilskiy go up and down completely randomly.

Pair Corralation between Morgan Stanley and GMK Norilskiy

If you would invest  2,055  in Morgan Stanley Direct on September 17, 2024 and sell it today you would earn a total of  63.00  from holding Morgan Stanley Direct or generate 3.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.0%
ValuesDaily Returns

Morgan Stanley Direct  vs.  GMK Norilskiy Nikel

 Performance 
       Timeline  
Morgan Stanley Direct 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.
GMK Norilskiy Nikel 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GMK Norilskiy Nikel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GMK Norilskiy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Morgan Stanley and GMK Norilskiy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Morgan Stanley and GMK Norilskiy

The main advantage of trading using opposite Morgan Stanley and GMK Norilskiy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, GMK Norilskiy 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 GMK Norilskiy will offset losses from the drop in GMK Norilskiy's long position.
The idea behind Morgan Stanley Direct and GMK Norilskiy Nikel 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.
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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