Correlation Between DAX Index and Morgan Stanley
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By analyzing existing cross correlation between DAX Index and Morgan Stanley, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Morgan Stanley.
Diversification Opportunities for DAX Index and Morgan Stanley
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Morgan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Morgan Stanley go up and down completely randomly.
Pair Corralation between DAX Index and Morgan Stanley
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Morgan Stanley. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 3.92 times less risky than Morgan Stanley. The index trades about -0.05 of its potential returns per unit of risk. The Morgan Stanley is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,795 in Morgan Stanley on August 29, 2024 and sell it today you would earn a total of 1,719 from holding Morgan Stanley or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Morgan Stanley
Performance |
| Timeline |
DAX Index and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Morgan Stanley
Pair trading matchups for Morgan Stanley
Pair Trading with DAX Index and Morgan Stanley
The main advantage of trading using opposite DAX Index and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| Morgan Stanley vs. Tower Semiconductor | Morgan Stanley vs. USWE SPORTS AB | Morgan Stanley vs. Fukuyama Transporting Co | Morgan Stanley vs. Transport International Holdings |
Check out your portfolio center.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.
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