Correlation Between Morgan Stanley and Lenox Pasifik

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

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

Diversification Opportunities for Morgan Stanley and Lenox Pasifik

-0.45

Correlation Coefficient

Morgan Stanley  Lenox Pasifik

Very good diversification

The 3 months correlation between Morgan and Lenox is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Lenox Pasifik Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenox Pasifik Investama 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 are associated (or correlated) with Lenox Pasifik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenox Pasifik Investama has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Lenox Pasifik go up and down completely randomly.

Pair Corralation between Morgan Stanley and Lenox Pasifik

Assuming the 90 days horizon Morgan Stanley is expected to generate 1.35 times less return on investment than Lenox Pasifik. But when comparing it to its historical volatility, Morgan Stanley is 6.97 times less risky than Lenox Pasifik. It trades about 0.27 of its potential returns per unit of risk. Lenox Pasifik Investama is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.25  in Lenox Pasifik Investama on April 22, 2025 and sell it today you would earn a total of  0.00  from holding Lenox Pasifik Investama or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Morgan Stanley  vs.  Lenox Pasifik Investama

Morgan Stanley

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Morgan Stanley reported solid returns over the last few months and may actually be approaching a breakup point.

Lenox Pasifik Investama

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lenox Pasifik Investama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Lenox Pasifik reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Morgan Stanley and Lenox Pasifik

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

The idea behind Morgan Stanley and Lenox Pasifik Investama 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.