Correlation Between Morgan Stanley and Gladstone Capital
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Gladstone 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 Gladstone 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 Gladstone Capital, you can compare the effects of market volatilities on Morgan Stanley and Gladstone 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 Gladstone Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Gladstone Capital.
Diversification Opportunities for Morgan Stanley and Gladstone Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Morgan and Gladstone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Gladstone Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone 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 Gladstone Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Capital has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Gladstone Capital go up and down completely randomly.
Pair Corralation between Morgan Stanley and Gladstone Capital
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 2.25 times more return on investment than Gladstone Capital. However, Morgan Stanley is 2.25 times more volatile than Gladstone Capital. It trades about 0.23 of its potential returns per unit of risk. Gladstone Capital is currently generating about 0.38 per unit of risk. If you would invest 9,849 in Morgan Stanley on August 31, 2024 and sell it today you would earn a total of 3,272 from holding Morgan Stanley or generate 33.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Gladstone Capital
Performance |
| Timeline |
| Morgan Stanley |
| Gladstone Capital |
Morgan Stanley and Gladstone Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Gladstone Capital
The main advantage of trading using opposite Morgan Stanley and Gladstone Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Gladstone 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 Gladstone Capital will offset losses from the drop in Gladstone Capital'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 |
| Gladstone Capital vs. PennantPark Floating Rate | Gladstone Capital vs. Horizon Technology Finance | Gladstone Capital vs. Stellus Capital Investment | Gladstone Capital vs. Prospect Capital |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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