Correlation Between Morgan Stanley and Cadeler AS
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Cadeler AS 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 Cadeler AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Cadeler AS, you can compare the effects of market volatilities on Morgan Stanley and Cadeler AS 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 Cadeler AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cadeler AS.
Diversification Opportunities for Morgan Stanley and Cadeler AS
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and Cadeler is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 are associated (or correlated) with Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cadeler AS go up and down completely randomly.
Pair Corralation between Morgan Stanley and Cadeler AS
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.76 times more return on investment than Cadeler AS. However, Morgan Stanley is 1.32 times less risky than Cadeler AS. It trades about -0.19 of its potential returns per unit of risk. Cadeler AS is currently generating about -0.17 per unit of risk. If you would invest 13,276 in Morgan Stanley on September 14, 2024 and sell it today you would lose (485.00) from holding Morgan Stanley or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Cadeler AS
Performance |
| Timeline |
| Morgan Stanley |
| Cadeler AS |
Morgan Stanley and Cadeler AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Cadeler AS
The main advantage of trading using opposite Morgan Stanley and Cadeler AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Cadeler AS 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 Cadeler AS will offset losses from the drop in Cadeler AS's long position.| Morgan Stanley vs. Nomura Holdings ADR | Morgan Stanley vs. Scully Royalty | Morgan Stanley vs. Oppenheimer Holdings | Morgan Stanley vs. Houlihan Lokey |
| Cadeler AS vs. Inflection Point Acquisition | Cadeler AS vs. Ryanair Holdings PLC | Cadeler AS vs. Hooker Furniture | Cadeler AS vs. Morgan Stanley |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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