Correlation Between Barclays Capital and Morgan Stanley

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Can any of the company-specific risk be diversified away by investing in both Barclays Capital 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 Barclays Capital and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and Morgan Stanley, you can compare the effects of market volatilities on Barclays Capital 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 Barclays Capital with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Morgan Stanley.

Diversification Opportunities for Barclays Capital and Morgan Stanley

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Barclays and Morgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and Barclays Capital 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 Barclays Capital 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 Barclays Capital i.e., Barclays Capital and Morgan Stanley go up and down completely randomly.

Pair Corralation between Barclays Capital and Morgan Stanley

If you would invest (100.00) in Morgan Stanley on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Morgan Stanley or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Barclays Capital  vs.  Morgan Stanley

 Performance 
       Timeline  
Barclays Capital 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Morgan Stanley 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Morgan Stanley has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Barclays Capital and Morgan Stanley Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barclays Capital and Morgan Stanley

The main advantage of trading using opposite Barclays Capital and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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.
The idea behind Barclays Capital and Morgan Stanley 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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