Correlation Between Hooker Furniture and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture 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 Hooker Furniture and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Morgan Stanley Direct, you can compare the effects of market volatilities on Hooker Furniture 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 Hooker Furniture with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Morgan Stanley.
Diversification Opportunities for Hooker Furniture and Morgan Stanley
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hooker and Morgan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture i.e., Hooker Furniture and Morgan Stanley go up and down completely randomly.
Pair Corralation between Hooker Furniture and Morgan Stanley
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Morgan Stanley. In addition to that, Hooker Furniture is 3.25 times more volatile than Morgan Stanley Direct. It trades about -0.12 of its total potential returns per unit of risk. Morgan Stanley Direct is currently generating about 0.13 per unit of volatility. If you would invest 1,968 in Morgan Stanley Direct on September 29, 2024 and sell it today you would earn a total of 167.00 from holding Morgan Stanley Direct or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Morgan Stanley Direct
Performance |
| Timeline |
| Hooker Furniture |
| Morgan Stanley Direct |
Hooker Furniture and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Morgan Stanley
The main advantage of trading using opposite Hooker Furniture and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture 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 Hooker Furniture and Morgan Stanley Direct 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.| Morgan Stanley vs. Hooker Furniture | Morgan Stanley vs. MI Homes | Morgan Stanley vs. Verra Mobility Corp | Morgan Stanley vs. SL Green Realty |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |