Correlation Between Morgan Stanley and Cathay Biotech
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By analyzing existing cross correlation between Morgan Stanley Direct and Cathay Biotech, you can compare the effects of market volatilities on Morgan Stanley and Cathay Biotech 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 Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cathay Biotech.
Diversification Opportunities for Morgan Stanley and Cathay Biotech
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Morgan and Cathay is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech 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 Direct are associated (or correlated) with Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cathay Biotech go up and down completely randomly.
Pair Corralation between Morgan Stanley and Cathay Biotech
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.57 times more return on investment than Cathay Biotech. However, Morgan Stanley Direct is 1.75 times less risky than Cathay Biotech. It trades about 0.04 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.01 per unit of risk. If you would invest 1,907 in Morgan Stanley Direct on September 14, 2024 and sell it today you would earn a total of 223.00 from holding Morgan Stanley Direct or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.54% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Cathay Biotech
Performance |
| Timeline |
| Morgan Stanley Direct |
| Cathay Biotech |
Morgan Stanley and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Cathay Biotech
The main advantage of trading using opposite Morgan Stanley and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.| Morgan Stanley vs. Sun Country Airlines | Morgan Stanley vs. Arm Holdings plc | Morgan Stanley vs. Ultra Clean Holdings | Morgan Stanley vs. Valens |
| Cathay Biotech vs. Suofeiya Home Collection | Cathay Biotech vs. Meinian Onehealth Healthcare | Cathay Biotech vs. Dezhan HealthCare Co | Cathay Biotech vs. PKU HealthCare Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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