Correlation Between Morgan Stanley and Unique Mining

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

Diversification Opportunities for Morgan Stanley and Unique Mining

-0.75

Correlation Coefficient

Morgan Stanley  Unique Mining

Pay attention - limited upside

The 3 months correlation between Morgan and Unique is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Unique Mining Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unique Mining Services 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 Unique Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unique Mining Services has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Unique Mining go up and down completely randomly.

Pair Corralation between Morgan Stanley and Unique Mining

Given the investment horizon of 90 days Morgan Stanley is expected to generate 31.13 times less return on investment than Unique Mining. But when comparing it to its historical volatility, Morgan Stanley Direct is 29.03 times less risky than Unique Mining. It trades about 0.04 of its potential returns per unit of risk. Unique Mining Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  159.00  in Unique Mining Services on September 27, 2024 and sell it today you would lose (120.00) from holding Unique Mining Services or give up 75.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	50.98%
Values	Daily Returns

Morgan Stanley Direct  vs.  Unique Mining Services

Morgan Stanley Direct

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Unique Mining Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unique Mining Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Morgan Stanley and Unique Mining

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

The idea behind Morgan Stanley Direct and Unique Mining Services 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.