Correlation Between Morgan Stanley and Ebusco Holding

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

Diversification Opportunities for Morgan Stanley and Ebusco Holding

-0.75

Correlation Coefficient

Morgan Stanley  Ebusco Holding

Pay attention - limited upside

The 3 months correlation between Morgan and Ebusco is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Ebusco Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebusco Holding BV 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 Ebusco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebusco Holding BV has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Ebusco Holding go up and down completely randomly.

Pair Corralation between Morgan Stanley and Ebusco Holding

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.06 times more return on investment than Ebusco Holding. However, Morgan Stanley Direct is 15.39 times less risky than Ebusco Holding. It trades about 0.16 of its potential returns per unit of risk. Ebusco Holding BV is currently generating about -0.06 per unit of risk. If you would invest  1,952  in Morgan Stanley Direct on September 19, 2024 and sell it today you would earn a total of  186.00  from holding Morgan Stanley Direct or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Morgan Stanley Direct  vs.  Ebusco Holding BV

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.

Ebusco Holding BV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ebusco Holding BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Morgan Stanley and Ebusco Holding

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

The idea behind Morgan Stanley Direct and Ebusco Holding BV 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.