Correlation Between Morgan Stanley and Cushing Mlp

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

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

Diversification Opportunities for Morgan Stanley and Cushing Mlp

0.87

Correlation Coefficient

Morgan Stanley  Cushing Mlp

Very poor diversification

The 3 months correlation between Morgan and Cushing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley India and Cushing Mlp Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushing Mlp Total 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 India are associated (or correlated) with Cushing Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushing Mlp Total has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cushing Mlp go up and down completely randomly.

Pair Corralation between Morgan Stanley and Cushing Mlp

Considering the 90-day investment horizon Morgan Stanley India is expected to generate 1.16 times more return on investment than Cushing Mlp. However, Morgan Stanley is 1.16 times more volatile than Cushing Mlp Total. It trades about 0.64 of its potential returns per unit of risk. Cushing Mlp Total is currently generating about 0.58 per unit of risk. If you would invest  2,775  in Morgan Stanley India on July 3, 2024 and sell it today you would earn a total of  233.00  from holding Morgan Stanley India or generate 8.4% return on investment over 90 days.

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

Morgan Stanley India  vs.  Cushing Mlp Total

Morgan Stanley India

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley India are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak forward indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Cushing Mlp Total

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cushing Mlp Total are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Cushing Mlp may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Morgan Stanley and Cushing Mlp

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

The idea behind Morgan Stanley India and Cushing Mlp Total 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.