Correlation Between Morgan Stanley and Intermedia Capital

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

Diversification Opportunities for Morgan Stanley and Intermedia Capital

0.0

Correlation Coefficient

Morgan Stanley  Intermedia Capital

Pay attention - limited upside

The 3 months correlation between Morgan and Intermedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Intermedia Capital Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedia Capital Tbk 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 Intermedia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedia Capital Tbk has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Intermedia Capital go up and down completely randomly.

Pair Corralation between Morgan Stanley and Intermedia Capital

If you would invest  1,952  in Morgan Stanley Direct on September 19, 2024 and sell it today you would earn a total of  133.00  from holding Morgan Stanley Direct or generate 6.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Morgan Stanley Direct  vs.  Intermedia Capital Tbk

Morgan Stanley Direct

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 8 (%) 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.

Intermedia Capital Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intermedia Capital Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Intermedia Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Morgan Stanley and Intermedia Capital

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

The idea behind Morgan Stanley Direct and Intermedia Capital Tbk 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.