Correlation Between Axis Technologies and Morgan Stanley

Can any of the company-specific risk be diversified away by investing in both Axis Technologies 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 Axis Technologies and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axis Technologies Group and Morgan Stanley, you can compare the effects of market volatilities on Axis Technologies 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 Axis Technologies with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axis Technologies and Morgan Stanley.

Diversification Opportunities for Axis Technologies and Morgan Stanley

-0.33

Correlation Coefficient

Axis Technologies  Morgan Stanley

Very good diversification

The 3 months correlation between Axis and Morgan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Axis Technologies Group and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and Axis Technologies 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 Axis Technologies Group 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 has no effect on the direction of Axis Technologies i.e., Axis Technologies and Morgan Stanley go up and down completely randomly.

Pair Corralation between Axis Technologies and Morgan Stanley

Given the investment horizon of 90 days Axis Technologies Group is expected to generate 155.02 times more return on investment than Morgan Stanley. However, Axis Technologies is 155.02 times more volatile than Morgan Stanley. It trades about 0.22 of its potential returns per unit of risk. Morgan Stanley is currently generating about -0.04 per unit of risk. If you would invest  0.04  in Axis Technologies Group on September 11, 2024 and sell it today you would earn a total of  0.10  from holding Axis Technologies Group or generate 250.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Axis Technologies Group  vs.  Morgan Stanley

Axis Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Morgan Stanley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Stanley has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Axis Technologies and Morgan Stanley

The main advantage of trading using opposite Axis Technologies and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axis Technologies 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.

The idea behind Axis Technologies Group and Morgan Stanley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.