Correlation Between Morgan Stanley and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and LUMI GRUPPEN 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 LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Direct and LUMI GRUPPEN AS, you can compare the effects of market volatilities on Morgan Stanley and LUMI GRUPPEN 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 LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and LUMI GRUPPEN.
Diversification Opportunities for Morgan Stanley and LUMI GRUPPEN
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and LUMI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS 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 LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between Morgan Stanley and LUMI GRUPPEN
Given the investment horizon of 90 days Morgan Stanley is expected to generate 55.37 times less return on investment than LUMI GRUPPEN. But when comparing it to its historical volatility, Morgan Stanley Direct is 5.42 times less risky than LUMI GRUPPEN. It trades about 0.01 of its potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 85.00 in LUMI GRUPPEN AS on September 24, 2024 and sell it today you would earn a total of 13.00 from holding LUMI GRUPPEN AS or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Morgan Stanley Direct vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| Morgan Stanley Direct |
| LUMI GRUPPEN AS |
Morgan Stanley and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and LUMI GRUPPEN
The main advantage of trading using opposite Morgan Stanley and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| Morgan Stanley vs. Uranium Energy Corp | Morgan Stanley vs. Alaska Air Group | Morgan Stanley vs. Coursera | Morgan Stanley vs. Four Seasons Education |
| LUMI GRUPPEN vs. LG Display Co | LUMI GRUPPEN vs. CHEMICAL INDUSTRIES | LUMI GRUPPEN vs. NISSAN CHEMICAL IND | LUMI GRUPPEN vs. Nissan Chemical 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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