Correlation Between Morgan Stanley and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and INFICON Holding 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 INFICON Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and INFICON Holding AG, you can compare the effects of market volatilities on Morgan Stanley and INFICON Holding 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and INFICON Holding.
Diversification Opportunities for Morgan Stanley and INFICON Holding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and INFICON is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and INFICON Holding go up and down completely randomly.
Pair Corralation between Morgan Stanley and INFICON Holding
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.14 times more return on investment than INFICON Holding. However, Morgan Stanley is 7.25 times less risky than INFICON Holding. It trades about -0.18 of its potential returns per unit of risk. INFICON Holding AG is currently generating about -0.21 per unit of risk. If you would invest 13,231 in Morgan Stanley on September 13, 2024 and sell it today you would lose (470.00) from holding Morgan Stanley or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. INFICON Holding AG
Performance |
| Timeline |
| Morgan Stanley |
| INFICON Holding AG |
Morgan Stanley and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and INFICON Holding
The main advantage of trading using opposite Morgan Stanley and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, INFICON Holding 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 INFICON Holding will offset losses from the drop in INFICON Holding's long position.| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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