Correlation Between NYSE Composite and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Morgan Stanley China, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Morgan Stanley.
Diversification Opportunities for NYSE Composite and Morgan Stanley
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Morgan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China and NYSE Composite 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 NYSE Composite 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 China has no effect on the direction of NYSE Composite i.e., NYSE Composite and Morgan Stanley go up and down completely randomly.
Pair Corralation between NYSE Composite and Morgan Stanley
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Morgan Stanley. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 1.23 times less risky than Morgan Stanley. The index trades about -0.12 of its potential returns per unit of risk. The Morgan Stanley China is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,222 in Morgan Stanley China on February 5, 2024 and sell it today you would earn a total of 37.00 from holding Morgan Stanley China or generate 3.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Morgan Stanley China
Performance |
Timeline |
NYSE Composite and Morgan Stanley Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Morgan Stanley China
Pair trading matchups for Morgan Stanley
Pair Trading with NYSE Composite and Morgan Stanley
The main advantage of trading using opposite NYSE Composite and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.NYSE Composite vs. Bridgford Foods | NYSE Composite vs. SunOpta | NYSE Composite vs. Where Food Comes | NYSE Composite vs. Sligro Food Group |
Morgan Stanley vs. John Hancock Income | Morgan Stanley vs. MFS High Income | Morgan Stanley vs. MFS Investment Grade | Morgan Stanley vs. AllianzGI Convertible Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Transaction History View history of all your transactions and understand their impact on performance | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |