Correlation Between Morgan Stanley and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and BitFrontier Capital 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 BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Morgan Stanley and BitFrontier Capital 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 BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and BitFrontier Capital.
Diversification Opportunities for Morgan Stanley and BitFrontier Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and BitFrontier is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital 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 BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Morgan Stanley and BitFrontier Capital
Assuming the 90 days horizon Morgan Stanley is expected to generate 17.33 times less return on investment than BitFrontier Capital. But when comparing it to its historical volatility, Morgan Stanley is 33.15 times less risky than BitFrontier Capital. It trades about 0.29 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.23 in BitFrontier Capital Holdings on August 29, 2024 and sell it today you would earn a total of 0.06 from holding BitFrontier Capital Holdings or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Morgan Stanley |
| BitFrontier Capital |
Morgan Stanley and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and BitFrontier Capital
The main advantage of trading using opposite Morgan Stanley and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Morgan Stanley vs. The Goldman Sachs | Morgan Stanley vs. The Goldman Sachs | Morgan Stanley vs. The Charles Schwab | Morgan Stanley vs. Morgan Stanley |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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