Correlation Between Kinetics Small and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Kinetics Small 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 Kinetics Small and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and Morgan Stanley European, you can compare the effects of market volatilities on Kinetics Small 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 Kinetics Small with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Morgan Stanley.
Diversification Opportunities for Kinetics Small and Morgan Stanley
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinetics and Morgan is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Morgan Stanley European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley European and Kinetics Small 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 Kinetics Small Cap 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 European has no effect on the direction of Kinetics Small i.e., Kinetics Small and Morgan Stanley go up and down completely randomly.
Pair Corralation between Kinetics Small and Morgan Stanley
Assuming the 90 days horizon Kinetics Small is expected to generate 1.34 times less return on investment than Morgan Stanley. In addition to that, Kinetics Small is 1.73 times more volatile than Morgan Stanley European. It trades about 0.18 of its total potential returns per unit of risk. Morgan Stanley European is currently generating about 0.42 per unit of volatility. If you would invest 2,407 in Morgan Stanley European on November 3, 2024 and sell it today you would earn a total of 203.00 from holding Morgan Stanley European or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Morgan Stanley European
Performance |
| Timeline |
| Kinetics Small Cap |
| Morgan Stanley European |
Kinetics Small and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Morgan Stanley
The main advantage of trading using opposite Kinetics Small and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small 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.| Kinetics Small vs. Goldman Sachs Financial | Kinetics Small vs. Financial Industries Fund | Kinetics Small vs. Blackstone Secured Lending | Kinetics Small vs. Prudential Financial Services |
| Morgan Stanley vs. Advent Claymore Convertible | Morgan Stanley vs. Rationalpier 88 Convertible | Morgan Stanley vs. Virtus Convertible | Morgan Stanley vs. Columbia Convertible Securities |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| 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 | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |