Correlation Between Morgan Stanley and Haitong Securities
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Haitong Securities 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 Haitong Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Haitong Securities Co, you can compare the effects of market volatilities on Morgan Stanley and Haitong Securities 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 Haitong Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Haitong Securities.
Diversification Opportunities for Morgan Stanley and Haitong Securities
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Haitong is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Haitong Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitong Securities 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 are associated (or correlated) with Haitong Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitong Securities has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Haitong Securities go up and down completely randomly.
Pair Corralation between Morgan Stanley and Haitong Securities
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.97 times more return on investment than Haitong Securities. However, Morgan Stanley is 1.04 times less risky than Haitong Securities. It trades about 0.02 of its potential returns per unit of risk. Haitong Securities Co is currently generating about -0.04 per unit of risk. If you would invest 7,801 in Morgan Stanley on January 18, 2024 and sell it today you would earn a total of 1,113 from holding Morgan Stanley or generate 14.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Morgan Stanley vs. Haitong Securities Co
Performance |
Timeline |
Morgan Stanley |
Haitong Securities |
Morgan Stanley and Haitong Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Haitong Securities
The main advantage of trading using opposite Morgan Stanley and Haitong Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Haitong Securities 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 Haitong Securities will offset losses from the drop in Haitong Securities' long position.Morgan Stanley vs. JPMorgan Chase Co | Morgan Stanley vs. Wells Fargo | Morgan Stanley vs. Citigroup | Morgan Stanley vs. American Express |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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