Correlation Between Morgan Stanley and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Siemens Energy 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 Siemens Energy 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 Siemens Energy AG, you can compare the effects of market volatilities on Morgan Stanley and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Siemens Energy.
Diversification Opportunities for Morgan Stanley and Siemens Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and Siemens is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy 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 Direct are associated (or correlated) with Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Siemens Energy go up and down completely randomly.
Pair Corralation between Morgan Stanley and Siemens Energy
Given the investment horizon of 90 days Morgan Stanley is expected to generate 5.04 times less return on investment than Siemens Energy. But when comparing it to its historical volatility, Morgan Stanley Direct is 2.27 times less risky than Siemens Energy. It trades about 0.03 of its potential returns per unit of risk. Siemens Energy AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,903 in Siemens Energy AG on October 13, 2024 and sell it today you would earn a total of 3,047 from holding Siemens Energy AG or generate 160.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 48.7% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Siemens Energy AG
Performance |
| Timeline |
| Morgan Stanley Direct |
| Siemens Energy AG |
Morgan Stanley and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Siemens Energy
The main advantage of trading using opposite Morgan Stanley and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy's long position.| Morgan Stanley vs. First Watch Restaurant | Morgan Stanley vs. Cannae Holdings | Morgan Stanley vs. BJs Restaurants | Morgan Stanley vs. Hewlett Packard Enterprise |
| Siemens Energy vs. RYANAIR HLDGS ADR | Siemens Energy vs. Alfa Financial Software | Siemens Energy vs. Firan Technology Group | Siemens Energy vs. DELTA AIR LINES |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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