Correlation Between Morgan Stanley and Locorr Long/short
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Locorr Long/short 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 Morgan Stanley and Locorr Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Focus and Locorr Longshort Modities, you can compare the effects of market volatilities on Morgan Stanley and Locorr Long/short 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 Morgan Stanley with a short position of Locorr Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Locorr Long/short.
Diversification Opportunities for Morgan Stanley and Locorr Long/short
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Locorr is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Focus and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities and Morgan Stanley 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 Morgan Stanley Focus are associated (or correlated) with Locorr Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Locorr Long/short go up and down completely randomly.
Pair Corralation between Morgan Stanley and Locorr Long/short
Assuming the 90 days horizon Morgan Stanley Focus is expected to generate 0.9 times more return on investment than Locorr Long/short. However, Morgan Stanley Focus is 1.11 times less risky than Locorr Long/short. It trades about 0.1 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.17 per unit of risk. If you would invest 1,003 in Morgan Stanley Focus on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Morgan Stanley Focus or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Morgan Stanley Focus vs. Locorr Longshort Modities
Performance |
| Timeline |
| Morgan Stanley Focus |
| Locorr Longshort Modities |
Morgan Stanley and Locorr Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Locorr Long/short
The main advantage of trading using opposite Morgan Stanley and Locorr Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Locorr Long/short 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 Locorr Long/short will offset losses from the drop in Locorr Long/short's long position.| Morgan Stanley vs. Needham Aggressive Growth | Morgan Stanley vs. T Rowe Price | Morgan Stanley vs. Victory High Income | Morgan Stanley vs. Pioneer High Income |
| Locorr Long/short vs. Rationalpier 88 Convertible | Locorr Long/short vs. Artisan Emerging Markets | Locorr Long/short vs. Multisector Bond Sma | Locorr Long/short vs. Versatile Bond Portfolio |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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