Correlation Between Morgan Stanley and Qiming Information

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

By analyzing existing cross correlation between Morgan Stanley Direct and Qiming Information Technology, you can compare the effects of market volatilities on Morgan Stanley and Qiming Information 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 Qiming Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Qiming Information.

Diversification Opportunities for Morgan Stanley and Qiming Information

0.52

Correlation Coefficient

Morgan Stanley  Qiming Information

Very weak diversification

The 3 months correlation between Morgan and Qiming is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Qiming Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiming Information 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 Direct are associated (or correlated) with Qiming Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiming Information has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Qiming Information go up and down completely randomly.

Pair Corralation between Morgan Stanley and Qiming Information

Given the investment horizon of 90 days Morgan Stanley is expected to generate 2.45 times less return on investment than Qiming Information. But when comparing it to its historical volatility, Morgan Stanley Direct is 2.5 times less risky than Qiming Information. It trades about 0.04 of its potential returns per unit of risk. Qiming Information Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,499  in Qiming Information Technology on September 27, 2024 and sell it today you would earn a total of  483.00  from holding Qiming Information Technology or generate 32.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	50.98%
Values	Daily Returns

Morgan Stanley Direct  vs.  Qiming Information Technology

Morgan Stanley Direct

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Qiming Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Qiming Information Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qiming Information may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Morgan Stanley and Qiming Information

The main advantage of trading using opposite Morgan Stanley and Qiming Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Qiming Information 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 Qiming Information will offset losses from the drop in Qiming Information's long position.

The idea behind Morgan Stanley Direct and Qiming Information Technology 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.