Correlation Between Morgan Stanley and San Neng

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

Diversification Opportunities for Morgan Stanley and San Neng

-0.45

Correlation Coefficient

Morgan Stanley  San Neng

Very good diversification

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

Pair Corralation between Morgan Stanley and San Neng

Given the investment horizon of 90 days Morgan Stanley is expected to generate 3.46 times less return on investment than San Neng. In addition to that, Morgan Stanley is 1.31 times more volatile than San Neng Group. It trades about 0.01 of its total potential returns per unit of risk. San Neng Group is currently generating about 0.04 per unit of volatility. If you would invest  4,190  in San Neng Group on December 26, 2024 and sell it today you would earn a total of  55.00  from holding San Neng Group or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.67%
Values	Daily Returns

Morgan Stanley Direct  vs.  San Neng Group

Morgan Stanley Direct

Risk-Adjusted Performance

Very Weak

Over the last 90 days Morgan Stanley Direct has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Morgan Stanley is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

San Neng Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in San Neng Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, San Neng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Morgan Stanley and San Neng

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

The idea behind Morgan Stanley Direct and San Neng Group 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 Stocks Directory module to find actively traded stocks across global markets.