Correlation Between Morgan Stanley and DOLFINES
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and DOLFINES 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 DOLFINES 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 DOLFINES SA EO, you can compare the effects of market volatilities on Morgan Stanley and DOLFINES 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 DOLFINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and DOLFINES.
Diversification Opportunities for Morgan Stanley and DOLFINES
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Morgan and DOLFINES is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and DOLFINES SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOLFINES SA EO 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 DOLFINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOLFINES SA EO has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and DOLFINES go up and down completely randomly.
Pair Corralation between Morgan Stanley and DOLFINES
Given the investment horizon of 90 days Morgan Stanley is expected to generate 427.37 times less return on investment than DOLFINES. But when comparing it to its historical volatility, Morgan Stanley Direct is 90.17 times less risky than DOLFINES. It trades about 0.04 of its potential returns per unit of risk. DOLFINES SA EO is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 50.00 in DOLFINES SA EO on September 29, 2024 and sell it today you would earn a total of 85.00 from holding DOLFINES SA EO or generate 170.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 46.72% |
| Values | Daily Returns |
Morgan Stanley Direct vs. DOLFINES SA EO
Performance |
| Timeline |
| Morgan Stanley Direct |
| DOLFINES SA EO |
Morgan Stanley and DOLFINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and DOLFINES
The main advantage of trading using opposite Morgan Stanley and DOLFINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, DOLFINES 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 DOLFINES will offset losses from the drop in DOLFINES's long position.| Morgan Stanley vs. Nascent Wine | Morgan Stanley vs. Kaltura | Morgan Stanley vs. Vita Coco | Morgan Stanley vs. Uber Technologies |
| DOLFINES vs. Nordic Semiconductor ASA | DOLFINES vs. Elmos Semiconductor SE | DOLFINES vs. HK Electric Investments | DOLFINES vs. ON SEMICONDUCTOR |
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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