Correlation Between Morgan Stanley and Cathedra Bitcoin
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Cathedra 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 Cathedra 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 Cathedra Bitcoin, you can compare the effects of market volatilities on Morgan Stanley and Cathedra 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 Cathedra Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cathedra Bitcoin.
Diversification Opportunities for Morgan Stanley and Cathedra Bitcoin
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Cathedra is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Cathedra Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedra Bitcoin 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 Cathedra Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedra Bitcoin has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cathedra Bitcoin go up and down completely randomly.
Pair Corralation between Morgan Stanley and Cathedra Bitcoin
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.5 times more return on investment than Cathedra Bitcoin. However, Morgan Stanley is 2.01 times less risky than Cathedra Bitcoin. It trades about 0.22 of its potential returns per unit of risk. Cathedra Bitcoin is currently generating about -0.1 per unit of risk. If you would invest 11,820 in Morgan Stanley on August 28, 2024 and sell it today you would earn a total of 1,546 from holding Morgan Stanley or generate 13.08% 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. Cathedra Bitcoin
Performance |
| Timeline |
| Morgan Stanley |
| Cathedra Bitcoin |
Morgan Stanley and Cathedra Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Cathedra Bitcoin
The main advantage of trading using opposite Morgan Stanley and Cathedra Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Cathedra 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 Cathedra Bitcoin will offset losses from the drop in Cathedra Bitcoin's long position.| Morgan Stanley vs. Visa Class A | Morgan Stanley vs. Diamond Hill Investment | Morgan Stanley vs. Distoken Acquisition | Morgan Stanley vs. AllianceBernstein Holding LP |
| Cathedra Bitcoin vs. Morgan Stanley | Cathedra Bitcoin vs. Goldman Sachs Group | Cathedra Bitcoin vs. Charles Schwab Corp | Cathedra Bitcoin vs. Interactive Brokers Group |
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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