Correlation Between CapitaLand Investment and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment 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 CapitaLand Investment and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapitaLand Investment Limited and Morgan Stanley, you can compare the effects of market volatilities on CapitaLand Investment 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 CapitaLand Investment with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and Morgan Stanley.
Diversification Opportunities for CapitaLand Investment and Morgan Stanley
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CapitaLand and Morgan is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and CapitaLand Investment 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 CapitaLand Investment Limited 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 has no effect on the direction of CapitaLand Investment i.e., CapitaLand Investment and Morgan Stanley go up and down completely randomly.
Pair Corralation between CapitaLand Investment and Morgan Stanley
Assuming the 90 days horizon CapitaLand Investment Limited is expected to generate 2.59 times more return on investment than Morgan Stanley. However, CapitaLand Investment is 2.59 times more volatile than Morgan Stanley. It trades about 0.19 of its potential returns per unit of risk. Morgan Stanley is currently generating about -0.23 per unit of risk. If you would invest 182.00 in CapitaLand Investment Limited on September 19, 2024 and sell it today you would earn a total of 17.00 from holding CapitaLand Investment Limited or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. Morgan Stanley
Performance |
| Timeline |
| CapitaLand Investment |
| Morgan Stanley |
CapitaLand Investment and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and Morgan Stanley
The main advantage of trading using opposite CapitaLand Investment and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment 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.| CapitaLand Investment vs. Asia Pptys | CapitaLand Investment vs. Adler Group SA | CapitaLand Investment vs. Ambase Corp | CapitaLand Investment vs. Bridgemarq Real Estate |
| Morgan Stanley vs. Scully Royalty | Morgan Stanley vs. Mercurity Fintech Holding | Morgan Stanley vs. Donnelley Financial Solutions | Morgan Stanley vs. CreditRiskMonitorCom |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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