Correlation Between Morgan Stanley and SBI Cards

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

Diversification Opportunities for Morgan Stanley and SBI Cards

0.17

Correlation Coefficient

Morgan Stanley  SBI Cards

Average diversification

The 3 months correlation between Morgan and SBI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and SBI Cards and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Cards 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 SBI Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Cards has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and SBI Cards go up and down completely randomly.

Pair Corralation between Morgan Stanley and SBI Cards

Given the investment horizon of 90 days Morgan Stanley is expected to generate 1.96 times less return on investment than SBI Cards. In addition to that, Morgan Stanley is 1.04 times more volatile than SBI Cards and. It trades about 0.0 of its total potential returns per unit of risk. SBI Cards and is currently generating about 0.01 per unit of volatility. If you would invest  73,000  in SBI Cards and on October 17, 2024 and sell it today you would earn a total of  470.00  from holding SBI Cards and or generate 0.64% return on investment over 90 days.

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

Morgan Stanley Direct  vs.  SBI Cards and

Morgan Stanley Direct

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SBI Cards

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBI Cards and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SBI Cards is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Morgan Stanley and SBI Cards

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

The idea behind Morgan Stanley Direct and SBI Cards and 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.