Correlation Between Morgan Stanley and ThaiDex SET50

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and ThaiDex SET50 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 ThaiDex SET50 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 ThaiDex SET50 Exchange, you can compare the effects of market volatilities on Morgan Stanley and ThaiDex SET50 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 ThaiDex SET50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and ThaiDex SET50.

Diversification Opportunities for Morgan Stanley and ThaiDex SET50

0.48

Correlation Coefficient

Morgan Stanley  ThaiDex SET50

Very weak diversification

The 3 months correlation between Morgan and ThaiDex is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and ThaiDex SET50 Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThaiDex SET50 Exchange 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 ThaiDex SET50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThaiDex SET50 Exchange has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and ThaiDex SET50 go up and down completely randomly.

Pair Corralation between Morgan Stanley and ThaiDex SET50

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.87 times more return on investment than ThaiDex SET50. However, Morgan Stanley Direct is 1.16 times less risky than ThaiDex SET50. It trades about -0.01 of its potential returns per unit of risk. ThaiDex SET50 Exchange is currently generating about -0.25 per unit of risk. If you would invest  2,083  in Morgan Stanley Direct on December 28, 2024 and sell it today you would lose (19.00) from holding Morgan Stanley Direct or give up 0.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Morgan Stanley Direct  vs.  ThaiDex SET50 Exchange

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

ThaiDex SET50 Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days ThaiDex SET50 Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with Morgan Stanley and ThaiDex SET50

The main advantage of trading using opposite Morgan Stanley and ThaiDex SET50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, ThaiDex SET50 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 ThaiDex SET50 will offset losses from the drop in ThaiDex SET50's long position.

The idea behind Morgan Stanley Direct and ThaiDex SET50 Exchange 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.