Correlation Between Morgan Stanley and Aqr Long
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Aqr Long 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 Aqr Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Institutional and Aqr Long Short Equity, you can compare the effects of market volatilities on Morgan Stanley and Aqr Long 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 Aqr Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Aqr Long.
Diversification Opportunities for Morgan Stanley and Aqr Long
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and Aqr is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short 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 Institutional are associated (or correlated) with Aqr Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Aqr Long go up and down completely randomly.
Pair Corralation between Morgan Stanley and Aqr Long
Assuming the 90 days horizon Morgan Stanley is expected to generate 2.61 times less return on investment than Aqr Long. In addition to that, Morgan Stanley is 1.67 times more volatile than Aqr Long Short Equity. It trades about 0.04 of its total potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.18 per unit of volatility. If you would invest 1,044 in Aqr Long Short Equity on September 4, 2024 and sell it today you would earn a total of 606.00 from holding Aqr Long Short Equity or generate 58.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Morgan Stanley Institutional vs. Aqr Long Short Equity
Performance |
| Timeline |
| Morgan Stanley Insti |
| Aqr Long Short |
Morgan Stanley and Aqr Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Aqr Long
The main advantage of trading using opposite Morgan Stanley and Aqr Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Aqr Long 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 Aqr Long will offset losses from the drop in Aqr Long's long position.| Morgan Stanley vs. Emerging Markets Equity | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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