Correlation Between Credit Suisse and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Credit Suisse and Morgan Stanley 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 Credit Suisse and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Suisse X Links and Morgan Stanley ETF, you can compare the effects of market volatilities on Credit Suisse 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 Credit Suisse with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Suisse and Morgan Stanley.
Diversification Opportunities for Credit Suisse and Morgan Stanley
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Credit and Morgan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF and Credit Suisse 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 Credit Suisse X Links 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 ETF has no effect on the direction of Credit Suisse i.e., Credit Suisse and Morgan Stanley go up and down completely randomly.
Pair Corralation between Credit Suisse and Morgan Stanley
Given the investment horizon of 90 days Credit Suisse is expected to generate 1.35 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, Credit Suisse X Links is 1.03 times less risky than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,306 in Morgan Stanley ETF on August 30, 2024 and sell it today you would earn a total of 520.00 from holding Morgan Stanley ETF or generate 22.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.57% |
| Values | Daily Returns |
Credit Suisse X Links vs. Morgan Stanley ETF
Performance |
| Timeline |
| Credit Suisse X |
| Morgan Stanley ETF |
Credit Suisse and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Suisse and Morgan Stanley
The main advantage of trading using opposite Credit Suisse and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse 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.| Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Credit Suisse X Links | Credit Suisse vs. Global X Alternative | Credit Suisse vs. Global X Russell |
| Morgan Stanley vs. Freedom Day Dividend | Morgan Stanley vs. Franklin Templeton ETF | Morgan Stanley vs. iShares MSCI China | Morgan Stanley vs. Tidal Trust II |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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