Correlation Between Morgan Stanley and Aqr Global

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

Diversification Opportunities for Morgan Stanley and Aqr Global

-0.58

Correlation Coefficient

Morgan Stanley  Aqr Global

Excellent diversification

The 3 months correlation between Morgan and Aqr is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro 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 Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Aqr Global go up and down completely randomly.

Pair Corralation between Morgan Stanley and Aqr Global

Given the investment horizon of 90 days Morgan Stanley is expected to generate 76.74 times less return on investment than Aqr Global. In addition to that, Morgan Stanley is 1.93 times more volatile than Aqr Global Macro. It trades about 0.0 of its total potential returns per unit of risk. Aqr Global Macro is currently generating about 0.3 per unit of volatility. If you would invest  922.00  in Aqr Global Macro on December 26, 2024 and sell it today you would earn a total of  85.00  from holding Aqr Global Macro or generate 9.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Morgan Stanley Direct  vs.  Aqr Global Macro

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 recent stock price mess, may contribute to short-term losses for the institutional investors.

Aqr Global Macro

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Global Macro are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Morgan Stanley and Aqr Global

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

The idea behind Morgan Stanley Direct and Aqr Global Macro 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.