Correlation Between U Power and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both U Power and Morgan Stanley 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 U Power and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Morgan Stanley Direct, you can compare the effects of market volatilities on U Power and Morgan Stanley 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 U Power with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Morgan Stanley.
Diversification Opportunities for U Power and Morgan Stanley
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UCAR and Morgan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Morgan Stanley Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Direct and U Power 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 U Power Limited are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Direct has no effect on the direction of U Power i.e., U Power and Morgan Stanley go up and down completely randomly.
Pair Corralation between U Power and Morgan Stanley
Given the investment horizon of 90 days U Power Limited is expected to generate 5.16 times more return on investment than Morgan Stanley. However, U Power is 5.16 times more volatile than Morgan Stanley Direct. It trades about 0.08 of its potential returns per unit of risk. Morgan Stanley Direct is currently generating about 0.01 per unit of risk. If you would invest 714.00 in U Power Limited on October 9, 2024 and sell it today you would earn a total of 39.00 from holding U Power Limited or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Morgan Stanley Direct
Performance |
| Timeline |
| U Power Limited |
| Morgan Stanley Direct |
U Power and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Morgan Stanley
The main advantage of trading using opposite U Power and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Morgan Stanley vs. Mangazeya Mining | Morgan Stanley vs. Logan Ridge Finance | Morgan Stanley vs. Kuya Silver | Morgan Stanley vs. Chester Mining |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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