Correlation Between Morgan Stanley and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Grayscale Bitcoin 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 Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Grayscale Bitcoin Cash, you can compare the effects of market volatilities on Morgan Stanley and Grayscale Bitcoin 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 Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Grayscale Bitcoin.
Diversification Opportunities for Morgan Stanley and Grayscale Bitcoin
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Grayscale is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Grayscale Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Cash 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 are associated (or correlated) with Grayscale Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Cash has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between Morgan Stanley and Grayscale Bitcoin
Assuming the 90 days horizon Morgan Stanley is expected to generate 0.07 times more return on investment than Grayscale Bitcoin. However, Morgan Stanley is 14.97 times less risky than Grayscale Bitcoin. It trades about 0.23 of its potential returns per unit of risk. Grayscale Bitcoin Cash is currently generating about -0.17 per unit of risk. If you would invest 2,339 in Morgan Stanley on August 31, 2024 and sell it today you would earn a total of 61.00 from holding Morgan Stanley or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Grayscale Bitcoin Cash
Performance |
| Timeline |
| Morgan Stanley |
| Grayscale Bitcoin Cash |
Morgan Stanley and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Grayscale Bitcoin
The main advantage of trading using opposite Morgan Stanley and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Grayscale Bitcoin 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 Grayscale Bitcoin will offset losses from the drop in Grayscale Bitcoin's long position.| Morgan Stanley vs. Morgan Stanley | Morgan Stanley vs. Morgan Stanley | Morgan Stanley vs. The Goldman Sachs | Morgan Stanley vs. Morgan Stanley |
| Grayscale Bitcoin vs. Grayscale Litecoin Trust | Grayscale Bitcoin vs. Grayscale Digital Large | Grayscale Bitcoin vs. Bitwise 10 Crypto | Grayscale Bitcoin vs. Grayscale Ethereum Trust |
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.
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