Correlation Between Morgan Stanley and CI Gold

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

Diversification Opportunities for Morgan Stanley and CI Gold

-0.1

Correlation Coefficient

Morgan Stanley  CI Gold

Good diversification

The 3 months correlation between Morgan and VALT-B is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and CI Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Bullion 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 CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Bullion has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and CI Gold go up and down completely randomly.

Pair Corralation between Morgan Stanley and CI Gold

Given the investment horizon of 90 days Morgan Stanley Direct is expected to under-perform the CI Gold. In addition to that, Morgan Stanley is 1.2 times more volatile than CI Gold Bullion. It trades about -0.04 of its total potential returns per unit of risk. CI Gold Bullion is currently generating about 0.22 per unit of volatility. If you would invest  3,850  in CI Gold Bullion on December 11, 2024 and sell it today you would earn a total of  287.00  from holding CI Gold Bullion or generate 7.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Morgan Stanley Direct  vs.  CI Gold Bullion

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

CI Gold Bullion

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Bullion are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak essential indicators, CI Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Morgan Stanley and CI Gold

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

The idea behind Morgan Stanley Direct and CI Gold Bullion 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.