Correlation Between Morgan Stanley and Cibc Atlas

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Cibc Atlas 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 Cibc Atlas 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 Cibc Atlas International, you can compare the effects of market volatilities on Morgan Stanley and Cibc Atlas 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 Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cibc Atlas.

Diversification Opportunities for Morgan Stanley and Cibc Atlas

-0.38

Correlation Coefficient

Morgan Stanley  Cibc Atlas

Very good diversification

The 3 months correlation between Morgan and Cibc is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Cibc Atlas International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas International 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 Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas International has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cibc Atlas go up and down completely randomly.

Pair Corralation between Morgan Stanley and Cibc Atlas

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.18 times more return on investment than Cibc Atlas. However, Morgan Stanley is 1.18 times more volatile than Cibc Atlas International. It trades about 0.16 of its potential returns per unit of risk. Cibc Atlas International is currently generating about 0.01 per unit of risk. If you would invest  1,951  in Morgan Stanley Direct on September 13, 2024 and sell it today you would earn a total of  188.00  from holding Morgan Stanley Direct or generate 9.64% return on investment over 90 days.

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

Morgan Stanley Direct  vs.  Cibc Atlas International

Morgan Stanley Direct

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cibc Atlas International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cibc Atlas International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cibc Atlas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Morgan Stanley and Cibc Atlas

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

The idea behind Morgan Stanley Direct and Cibc Atlas International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.