Correlation Between Carlyle and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Morgan Stanley Direct, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Morgan Stanley.
Diversification Opportunities for Carlyle and Morgan Stanley
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlyle and Morgan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Morgan Stanley Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Direct and Carlyle 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 Carlyle Group 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 Direct has no effect on the direction of Carlyle i.e., Carlyle and Morgan Stanley go up and down completely randomly.
Pair Corralation between Carlyle and Morgan Stanley
Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Morgan Stanley. In addition to that, Carlyle is 3.31 times more volatile than Morgan Stanley Direct. It trades about -0.24 of its total potential returns per unit of risk. Morgan Stanley Direct is currently generating about -0.16 per unit of volatility. If you would invest 2,103 in Morgan Stanley Direct on November 28, 2024 and sell it today you would lose (43.00) from holding Morgan Stanley Direct or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Carlyle Group vs. Morgan Stanley Direct
Performance |
| Timeline |
| Carlyle Group |
| Morgan Stanley Direct |
Carlyle and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Morgan Stanley
The main advantage of trading using opposite Carlyle and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| Morgan Stanley vs. The Cheesecake Factory | Morgan Stanley vs. Scholastic | Morgan Stanley vs. New Oriental Education | Morgan Stanley vs. Life Time Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |