Correlation Between Morgan Stanley and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Firsthand Alternative 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 Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Global and Firsthand Alternative Energy, you can compare the effects of market volatilities on Morgan Stanley and Firsthand Alternative 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 Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Firsthand Alternative.
Diversification Opportunities for Morgan Stanley and Firsthand Alternative
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Morgan and Firsthand is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative 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 Global are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Morgan Stanley and Firsthand Alternative
Assuming the 90 days horizon Morgan Stanley Global is expected to generate 0.98 times more return on investment than Firsthand Alternative. However, Morgan Stanley Global is 1.02 times less risky than Firsthand Alternative. It trades about 0.08 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about -0.03 per unit of risk. If you would invest 1,683 in Morgan Stanley Global on August 30, 2024 and sell it today you would earn a total of 42.00 from holding Morgan Stanley Global or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Morgan Stanley Global |
| Firsthand Alternative |
Morgan Stanley and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Firsthand Alternative
The main advantage of trading using opposite Morgan Stanley and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| Morgan Stanley vs. Firsthand Alternative Energy | Morgan Stanley vs. Portfolio 21 Global | Morgan Stanley vs. HUMANA INC | Morgan Stanley vs. Aquagold International |
| Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha | Firsthand Alternative vs. Environment And Alternative | Firsthand Alternative vs. Aquagold International |
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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