Correlation Between Morgan Stanley and Yihai International
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Yihai International 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 Yihai International 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 Yihai International Holding, you can compare the effects of market volatilities on Morgan Stanley and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Yihai International.
Diversification Opportunities for Morgan Stanley and Yihai International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Morgan and Yihai is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Yihai International go up and down completely randomly.
Pair Corralation between Morgan Stanley and Yihai International
Given the investment horizon of 90 days Morgan Stanley is expected to generate 3.27 times less return on investment than Yihai International. But when comparing it to its historical volatility, Morgan Stanley Direct is 3.17 times less risky than Yihai International. It trades about 0.04 of its potential returns per unit of risk. Yihai International Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Yihai International Holding on September 13, 2024 and sell it today you would earn a total of 66.00 from holding Yihai International Holding or generate 58.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 44.55% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Yihai International Holding
Performance |
| Timeline |
| Morgan Stanley Direct |
| Yihai International |
Morgan Stanley and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Yihai International
The main advantage of trading using opposite Morgan Stanley and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| Morgan Stanley vs. Tesla Inc | Morgan Stanley vs. Genfit | Morgan Stanley vs. Pinterest | Morgan Stanley vs. Tarsus Pharmaceuticals |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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