Correlation Between Morgan Stanley and Pyxis Tankers

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

Diversification Opportunities for Morgan Stanley and Pyxis Tankers

-0.75

Correlation Coefficient

Morgan Stanley  Pyxis Tankers

Pay attention - limited upside

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

Pair Corralation between Morgan Stanley and Pyxis Tankers

Given the investment horizon of 90 days Morgan Stanley is expected to generate 73.8 times less return on investment than Pyxis Tankers. But when comparing it to its historical volatility, Morgan Stanley Direct is 44.92 times less risky than Pyxis Tankers. It trades about 0.04 of its potential returns per unit of risk. Pyxis Tankers is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Pyxis Tankers on September 13, 2024 and sell it today you would lose (71.00) from holding Pyxis Tankers or give up 71.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

Morgan Stanley Direct  vs.  Pyxis Tankers

Morgan Stanley Direct

Risk-Adjusted Performance

12 of 100

OK

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.

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Morgan Stanley and Pyxis Tankers

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

The idea behind Morgan Stanley Direct and Pyxis Tankers 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.