Correlation Between Morgan Stanley and Nonthavej Hospital

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

Diversification Opportunities for Morgan Stanley and Nonthavej Hospital

-0.4

Correlation Coefficient

Morgan Stanley  Nonthavej Hospital

Very good diversification

The 3 months correlation between Morgan and Nonthavej is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Nonthavej Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nonthavej Hospital 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 Nonthavej Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nonthavej Hospital Public has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Nonthavej Hospital go up and down completely randomly.

Pair Corralation between Morgan Stanley and Nonthavej Hospital

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.22 times more return on investment than Nonthavej Hospital. However, Morgan Stanley is 1.22 times more volatile than Nonthavej Hospital Public. It trades about 0.11 of its potential returns per unit of risk. Nonthavej Hospital Public is currently generating about -0.06 per unit of risk. If you would invest  1,943  in Morgan Stanley Direct on October 7, 2024 and sell it today you would earn a total of  139.00  from holding Morgan Stanley Direct or generate 7.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Morgan Stanley Direct  vs.  Nonthavej Hospital Public

Morgan Stanley Direct

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 9 (%) 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 February 2025.

Nonthavej Hospital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nonthavej Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nonthavej Hospital 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 Nonthavej Hospital

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

The idea behind Morgan Stanley Direct and Nonthavej Hospital 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.

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 Stocks Directory module to find actively traded stocks across global markets.