Correlation Between Morgan Stanley and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Hampton Financial 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 Hampton Financial 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 Hampton Financial Corp, you can compare the effects of market volatilities on Morgan Stanley and Hampton Financial 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 Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Hampton Financial.
Diversification Opportunities for Morgan Stanley and Hampton Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Morgan and Hampton is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp 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 Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Hampton Financial go up and down completely randomly.
Pair Corralation between Morgan Stanley and Hampton Financial
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.59 times more return on investment than Hampton Financial. However, Morgan Stanley Direct is 1.7 times less risky than Hampton Financial. It trades about 0.03 of its potential returns per unit of risk. Hampton Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 1,862 in Morgan Stanley Direct on December 4, 2024 and sell it today you would earn a total of 144.00 from holding Morgan Stanley Direct or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.28% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Hampton Financial Corp
Performance |
| Timeline |
| Morgan Stanley Direct |
| Hampton Financial Corp |
Morgan Stanley and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Hampton Financial
The main advantage of trading using opposite Morgan Stanley and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Hampton Financial 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 Hampton Financial will offset losses from the drop in Hampton Financial's long position.| Morgan Stanley vs. WPP PLC ADR | Morgan Stanley vs. Townsquare Media | Morgan Stanley vs. CenterPoint Energy | Morgan Stanley vs. ZW Data Action |
| Hampton Financial vs. Adex Mining | Hampton Financial vs. Profound Medical Corp | Hampton Financial vs. XXIX Metal Corp | Hampton Financial vs. NeXGold Mining 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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