Correlation Between Morgan Stanley and NEXANS
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and NEXANS 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 NEXANS 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 NEXANS, you can compare the effects of market volatilities on Morgan Stanley and NEXANS 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 NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and NEXANS.
Diversification Opportunities for Morgan Stanley and NEXANS
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and NEXANS is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS 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 NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and NEXANS go up and down completely randomly.
Pair Corralation between Morgan Stanley and NEXANS
Given the investment horizon of 90 days Morgan Stanley Direct is expected to under-perform the NEXANS. But the stock apears to be less risky and, when comparing its historical volatility, Morgan Stanley Direct is 1.57 times less risky than NEXANS. The stock trades about -0.03 of its potential returns per unit of risk. The NEXANS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 10,840 in NEXANS on September 19, 2024 and sell it today you would lose (280.00) from holding NEXANS or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Morgan Stanley Direct vs. NEXANS
Performance |
| Timeline |
| Morgan Stanley Direct |
| NEXANS |
Morgan Stanley and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and NEXANS
The main advantage of trading using opposite Morgan Stanley and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| Morgan Stanley vs. Mesa Air Group | Morgan Stanley vs. Air Transport Services | Morgan Stanley vs. SmartStop Self Storage | Morgan Stanley vs. Q2 Holdings |
| NEXANS vs. Fidelity National Information | NEXANS vs. Science Applications International | NEXANS vs. National Storage Affiliates | NEXANS vs. PKSHA TECHNOLOGY INC |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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