Correlation Between Morgan Stanley and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Thunder Bridge 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 Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Thunder Bridge Capital, you can compare the effects of market volatilities on Morgan Stanley and Thunder Bridge 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 Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Thunder Bridge.
Diversification Opportunities for Morgan Stanley and Thunder Bridge
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Thunder is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge 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 Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Thunder Bridge go up and down completely randomly.
Pair Corralation between Morgan Stanley and Thunder Bridge
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 2.69 times more return on investment than Thunder Bridge. However, Morgan Stanley is 2.69 times more volatile than Thunder Bridge Capital. It trades about 0.26 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.34 per unit of risk. If you would invest 11,596 in Morgan Stanley on August 26, 2024 and sell it today you would earn a total of 1,873 from holding Morgan Stanley or generate 16.15% 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. Thunder Bridge Capital
Performance |
| Timeline |
| Morgan Stanley |
| Thunder Bridge Capital |
Morgan Stanley and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Thunder Bridge
The main advantage of trading using opposite Morgan Stanley and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Thunder Bridge 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 Thunder Bridge will offset losses from the drop in Thunder Bridge'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 |
| Thunder Bridge vs. PowerUp Acquisition Corp | Thunder Bridge vs. Aurora Innovation | Thunder Bridge vs. HUMANA INC | Thunder Bridge vs. Aquagold International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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