Correlation Between Morgan Stanley and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Cheche Group 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 Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Cheche Group Class, you can compare the effects of market volatilities on Morgan Stanley and Cheche Group 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 Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cheche Group.
Diversification Opportunities for Morgan Stanley and Cheche Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Cheche is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cheche Group go up and down completely randomly.
Pair Corralation between Morgan Stanley and Cheche Group
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.27 times more return on investment than Cheche Group. However, Morgan Stanley is 3.73 times less risky than Cheche Group. It trades about 0.15 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.02 per unit of risk. If you would invest 9,505 in Morgan Stanley on September 3, 2024 and sell it today you would earn a total of 3,598 from holding Morgan Stanley or generate 37.85% 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. Cheche Group Class
Performance |
| Timeline |
| Morgan Stanley |
| Cheche Group Class |
Morgan Stanley and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Cheche Group
The main advantage of trading using opposite Morgan Stanley and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain | Morgan Stanley vs. Hut 8 Corp |
| Cheche Group vs. Zillow Group Class | Cheche Group vs. Kanzhun Ltd ADR | Cheche Group vs. Outbrain | Cheche Group vs. TuanChe ADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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