Correlation Between ChampionX and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Morgan Stanley Direct, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Morgan Stanley.
Diversification Opportunities for ChampionX and Morgan Stanley
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChampionX and Morgan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX 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 ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Morgan Stanley go up and down completely randomly.
Pair Corralation between ChampionX and Morgan Stanley
Considering the 90-day investment horizon ChampionX is expected to generate 2.39 times more return on investment than Morgan Stanley. However, ChampionX is 2.39 times more volatile than Morgan Stanley Direct. It trades about 0.1 of its potential returns per unit of risk. Morgan Stanley Direct is currently generating about 0.15 per unit of risk. If you would invest 2,742 in ChampionX on November 6, 2024 and sell it today you would earn a total of 122.00 from holding ChampionX or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ChampionX vs. Morgan Stanley Direct
Performance |
| Timeline |
| ChampionX |
| Morgan Stanley Direct |
ChampionX and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Morgan Stanley
The main advantage of trading using opposite ChampionX and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Morgan Stanley vs. Molecular Partners AG | Morgan Stanley vs. Arrow Electronics | Morgan Stanley vs. United States Steel | Morgan Stanley vs. Lipocine |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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