Correlation Between Morgan Stanley and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Baillie Gifford 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 Baillie Gifford 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 Baillie Gifford European, you can compare the effects of market volatilities on Morgan Stanley and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Baillie Gifford.
Diversification Opportunities for Morgan Stanley and Baillie Gifford
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Baillie is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford European has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Baillie Gifford go up and down completely randomly.
Pair Corralation between Morgan Stanley and Baillie Gifford
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.72 times more return on investment than Baillie Gifford. However, Morgan Stanley is 1.72 times more volatile than Baillie Gifford European. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford European is currently generating about 0.05 per unit of risk. If you would invest 1,907 in Morgan Stanley Direct on September 19, 2024 and sell it today you would earn a total of 178.00 from holding Morgan Stanley Direct or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.16% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Baillie Gifford European
Performance |
| Timeline |
| Morgan Stanley Direct |
| Baillie Gifford European |
Morgan Stanley and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Baillie Gifford
The main advantage of trading using opposite Morgan Stanley and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Morgan Stanley vs. Mesa Air Group | Morgan Stanley vs. Air Transport Services | Morgan Stanley vs. SmartStop Self Storage | Morgan Stanley vs. Q2 Holdings |
| Baillie Gifford vs. British American Tobacco | Baillie Gifford vs. Gaztransport et Technigaz | Baillie Gifford vs. Pets at Home | Baillie Gifford vs. Fulcrum Metals PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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