Correlation Between Aqr Global and Morgan Stanley

Can any of the company-specific risk be diversified away by investing in both Aqr Global and Morgan Stanley 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 Aqr Global and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Global Macro and Morgan Stanley Global, you can compare the effects of market volatilities on Aqr Global and Morgan Stanley 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 Aqr Global with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Morgan Stanley.

Diversification Opportunities for Aqr Global and Morgan Stanley

0.07

Correlation Coefficient

Aqr Global  Morgan Stanley

Significant diversification

The 3 months correlation between Aqr and Morgan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Morgan Stanley Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Global and Aqr Global 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 Aqr Global Macro are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Global has no effect on the direction of Aqr Global i.e., Aqr Global and Morgan Stanley go up and down completely randomly.

Pair Corralation between Aqr Global and Morgan Stanley

Assuming the 90 days horizon Aqr Global Macro is expected to generate 0.47 times more return on investment than Morgan Stanley. However, Aqr Global Macro is 2.14 times less risky than Morgan Stanley. It trades about 0.31 of its potential returns per unit of risk. Morgan Stanley Global is currently generating about 0.1 per unit of risk. If you would invest  933.00  in Aqr Global Macro on December 20, 2024 and sell it today you would earn a total of  85.00  from holding Aqr Global Macro or generate 9.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aqr Global Macro  vs.  Morgan Stanley Global

Aqr Global Macro

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Global Macro are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Morgan Stanley Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Global are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aqr Global and Morgan Stanley

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

The idea behind Aqr Global Macro and Morgan Stanley Global 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 Transaction History module to view history of all your transactions and understand their impact on performance.