Correlation Between Morgan Stanley and Wattanapat Hospital

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

Diversification Opportunities for Morgan Stanley and Wattanapat Hospital

-0.72

Correlation Coefficient

Morgan Stanley  Wattanapat Hospital

Pay attention - limited upside

The 3 months correlation between Morgan and Wattanapat is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang 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 Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between Morgan Stanley and Wattanapat Hospital

Given the investment horizon of 90 days Morgan Stanley is expected to generate 32.72 times less return on investment than Wattanapat Hospital. But when comparing it to its historical volatility, Morgan Stanley Direct is 27.89 times less risky than Wattanapat Hospital. It trades about 0.04 of its potential returns per unit of risk. Wattanapat Hospital Trang is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  363.00  in Wattanapat Hospital Trang on September 13, 2024 and sell it today you would earn a total of  572.00  from holding Wattanapat Hospital Trang or generate 157.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	46.67%
Values	Daily Returns

Morgan Stanley Direct  vs.  Wattanapat Hospital Trang

Morgan Stanley Direct

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wattanapat Hospital Trang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wattanapat Hospital Trang 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 technical 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 Wattanapat Hospital

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

The idea behind Morgan Stanley Direct and Wattanapat Hospital Trang 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..