Correlation Between Morgan Stanley and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Bridgford Foods 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 Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Bridgford Foods, you can compare the effects of market volatilities on Morgan Stanley and Bridgford Foods 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 Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Bridgford Foods.
Diversification Opportunities for Morgan Stanley and Bridgford Foods
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Bridgford is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods 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 Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Bridgford Foods go up and down completely randomly.
Pair Corralation between Morgan Stanley and Bridgford Foods
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.58 times more return on investment than Bridgford Foods. However, Morgan Stanley is 1.71 times less risky than Bridgford Foods. It trades about 0.15 of its potential returns per unit of risk. Bridgford Foods is currently generating about -0.01 per unit of risk. If you would invest 7,579 in Morgan Stanley on August 25, 2024 and sell it today you would earn a total of 5,920 from holding Morgan Stanley or generate 78.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Morgan Stanley vs. Bridgford Foods
Performance |
| Timeline |
| Morgan Stanley |
| Bridgford Foods |
Morgan Stanley and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Bridgford Foods
The main advantage of trading using opposite Morgan Stanley and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Bridgford Foods 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 Bridgford Foods will offset losses from the drop in Bridgford Foods' long position.| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
| Bridgford Foods vs. Bellring Brands LLC | Bridgford Foods vs. Ingredion Incorporated | Bridgford Foods vs. John B Sanfilippo | Bridgford Foods vs. Nomad Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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