Correlation Between Morgan Stanley and Plus500
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Plus500 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 Plus500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Plus500, you can compare the effects of market volatilities on Morgan Stanley and Plus500 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 Plus500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Plus500.
Diversification Opportunities for Morgan Stanley and Plus500
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Plus500 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Plus500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plus500 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 Plus500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plus500 has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Plus500 go up and down completely randomly.
Pair Corralation between Morgan Stanley and Plus500
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 1.63 times less return on investment than Plus500. But when comparing it to its historical volatility, Morgan Stanley is 2.56 times less risky than Plus500. It trades about 0.07 of its potential returns per unit of risk. Plus500 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Plus500 on August 26, 2024 and sell it today you would earn a total of 969.00 from holding Plus500 or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.23% |
| Values | Daily Returns |
Morgan Stanley vs. Plus500
Performance |
| Timeline |
| Morgan Stanley |
| Plus500 |
Morgan Stanley and Plus500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Plus500
The main advantage of trading using opposite Morgan Stanley and Plus500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Plus500 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 Plus500 will offset losses from the drop in Plus500'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 |
| Plus500 vs. MarketAxess Holdings | Plus500 vs. Interactive Brokers Group | Plus500 vs. Evercore Partners | Plus500 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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