Correlation Between Interactive Brokers and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers and Morgan Stanley 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 Interactive Brokers and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interactive Brokers Group and Morgan Stanley, you can compare the effects of market volatilities on Interactive Brokers and Morgan Stanley 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 Interactive Brokers with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Morgan Stanley.
Diversification Opportunities for Interactive Brokers and Morgan Stanley
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interactive and Morgan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and Interactive Brokers 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 Interactive Brokers Group are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley has no effect on the direction of Interactive Brokers i.e., Interactive Brokers and Morgan Stanley go up and down completely randomly.
Pair Corralation between Interactive Brokers and Morgan Stanley
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 1.09 times more return on investment than Morgan Stanley. However, Interactive Brokers is 1.09 times more volatile than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley is currently generating about 0.03 per unit of risk. If you would invest 5,683 in Interactive Brokers Group on January 25, 2024 and sell it today you would earn a total of 5,786 from holding Interactive Brokers Group or generate 101.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interactive Brokers Group vs. Morgan Stanley
Performance |
| Timeline |
| Interactive Brokers |
| Morgan Stanley |
Interactive Brokers and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and Morgan Stanley
The main advantage of trading using opposite Interactive Brokers and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| Interactive Brokers vs. JPMorgan Chase Co | Interactive Brokers vs. Wells Fargo | Interactive Brokers vs. Citigroup | Interactive Brokers vs. American Express |
| Morgan Stanley vs. JPMorgan Chase Co | Morgan Stanley vs. Wells Fargo | Morgan Stanley vs. Citigroup | Morgan Stanley vs. American Express |
Check out your portfolio center.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stocks Directory Find actively traded stocks across global markets |