Correlation Between China Finance and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both China Finance 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 China Finance and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Finance Online and Morgan Stanley, you can compare the effects of market volatilities on China Finance 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 China Finance with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Finance and Morgan Stanley.
Diversification Opportunities for China Finance and Morgan Stanley
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Morgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Finance Online and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and China Finance 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 China Finance Online 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 China Finance i.e., China Finance and Morgan Stanley go up and down completely randomly.
Pair Corralation between China Finance and Morgan Stanley
Assuming the 90 days horizon China Finance Online is expected to generate 38.25 times more return on investment than Morgan Stanley. However, China Finance is 38.25 times more volatile than Morgan Stanley. It trades about 0.06 of its potential returns per unit of risk. Morgan Stanley is currently generating about 0.14 per unit of risk. If you would invest 0.01 in China Finance Online on August 26, 2024 and sell it today you would earn a total of 0.00 from holding China Finance Online or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Finance Online vs. Morgan Stanley
Performance |
| Timeline |
| China Finance Online |
| Morgan Stanley |
China Finance and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Finance and Morgan Stanley
The main advantage of trading using opposite China Finance and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Finance 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.| China Finance vs. Morgan Stanley | China Finance vs. Goldman Sachs Group | China Finance vs. Charles Schwab Corp | China Finance vs. Interactive Brokers Group |
| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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