Correlation Between Morgan Stanley and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Morgan Stanley and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and TIMES CHINA.
Diversification Opportunities for Morgan Stanley and TIMES CHINA
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Morgan and TIMES is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and TIMES CHINA go up and down completely randomly.
Pair Corralation between Morgan Stanley and TIMES CHINA
Given the investment horizon of 90 days Morgan Stanley is expected to generate 94.59 times less return on investment than TIMES CHINA. But when comparing it to its historical volatility, Morgan Stanley Direct is 5.43 times less risky than TIMES CHINA. It trades about 0.01 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2.75 in TIMES CHINA HLDGS on September 24, 2024 and sell it today you would earn a total of 0.85 from holding TIMES CHINA HLDGS or generate 30.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Morgan Stanley Direct vs. TIMES CHINA HLDGS
Performance |
Timeline |
Morgan Stanley Direct |
TIMES CHINA HLDGS |
Morgan Stanley and TIMES CHINA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and TIMES CHINA
The main advantage of trading using opposite Morgan Stanley and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.Morgan Stanley vs. Uranium Energy Corp | Morgan Stanley vs. Alaska Air Group | Morgan Stanley vs. Coursera | Morgan Stanley vs. Four Seasons Education |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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