Correlation Between Morgan Stanley and Duell Oyj

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

Diversification Opportunities for Morgan Stanley and Duell Oyj

-0.31

Correlation Coefficient

Morgan Stanley  Duell Oyj

Very good diversification

The 3 months correlation between Morgan and Duell is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Duell Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duell Oyj 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 Duell Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duell Oyj has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Duell Oyj go up and down completely randomly.

Pair Corralation between Morgan Stanley and Duell Oyj

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.47 times more return on investment than Duell Oyj. However, Morgan Stanley Direct is 2.14 times less risky than Duell Oyj. It trades about 0.08 of its potential returns per unit of risk. Duell Oyj is currently generating about -0.18 per unit of risk. If you would invest  1,995  in Morgan Stanley Direct on September 21, 2024 and sell it today you would earn a total of  69.00  from holding Morgan Stanley Direct or generate 3.46% return on investment over 90 days.

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

Morgan Stanley Direct  vs.  Duell Oyj

Morgan Stanley Direct

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Morgan Stanley is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Duell Oyj

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Duell Oyj are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Duell Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Morgan Stanley and Duell Oyj

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

The idea behind Morgan Stanley Direct and Duell Oyj 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.