Correlation Between Morgan Stanley and National Grid
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and National Grid 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 National Grid 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 National Grid Plc, you can compare the effects of market volatilities on Morgan Stanley and National Grid 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 National Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and National Grid.
Diversification Opportunities for Morgan Stanley and National Grid
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and National Grid Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Grid Plc 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 National Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Grid Plc has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and National Grid go up and down completely randomly.
Pair Corralation between Morgan Stanley and National Grid
If you would invest 1,862 in Morgan Stanley Direct on October 22, 2024 and sell it today you would earn a total of 281.00 from holding Morgan Stanley Direct or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Morgan Stanley Direct vs. National Grid Plc
Performance |
| Timeline |
| Morgan Stanley Direct |
| National Grid Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Morgan Stanley and National Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and National Grid
The main advantage of trading using opposite Morgan Stanley and National Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, National Grid 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 National Grid will offset losses from the drop in National Grid's long position.| Morgan Stanley vs. LB Foster | Morgan Stanley vs. BJs Restaurants | Morgan Stanley vs. Healthy Coffee International | Morgan Stanley vs. Ryanair Holdings PLC |
| National Grid vs. SCANSOURCE | National Grid vs. MCEWEN MINING INC | National Grid vs. Harmony Gold Mining | National Grid vs. SIERRA METALS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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