Correlation Between Morgan Stanley and China Galaxy
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and China Galaxy 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 China Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and China Galaxy Securities, you can compare the effects of market volatilities on Morgan Stanley and China Galaxy 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 China Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and China Galaxy.
Diversification Opportunities for Morgan Stanley and China Galaxy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and China is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and China Galaxy Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Galaxy Securities 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 China Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Galaxy Securities has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and China Galaxy go up and down completely randomly.
Pair Corralation between Morgan Stanley and China Galaxy
If you would invest 11,700 in Morgan Stanley on August 31, 2024 and sell it today you would earn a total of 1,421 from holding Morgan Stanley or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Morgan Stanley vs. China Galaxy Securities
Performance |
| Timeline |
| Morgan Stanley |
| China Galaxy Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Morgan Stanley and China Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and China Galaxy
The main advantage of trading using opposite Morgan Stanley and China Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, China Galaxy 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 China Galaxy will offset losses from the drop in China Galaxy's long position.| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
| China Galaxy vs. Evercore Partners | China Galaxy vs. Lazard | China Galaxy vs. Moelis Co | China Galaxy vs. PJT Partners |
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 CEOs Directory module to screen CEOs from public companies around the world.
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