Correlation Between TYSNES SPAREBANK and Morgan Stanley

Can any of the company-specific risk be diversified away by investing in both TYSNES SPAREBANK 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 TYSNES SPAREBANK and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TYSNES SPAREBANK NK and Morgan Stanley, you can compare the effects of market volatilities on TYSNES SPAREBANK 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 TYSNES SPAREBANK with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSNES SPAREBANK and Morgan Stanley.

Diversification Opportunities for TYSNES SPAREBANK and Morgan Stanley

-0.2

Correlation Coefficient

TYSNES SPAREBANK  Morgan Stanley

Good diversification

The 3 months correlation between TYSNES and Morgan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TYSNES SPAREBANK NK and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and TYSNES SPAREBANK 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 TYSNES SPAREBANK NK 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 has no effect on the direction of TYSNES SPAREBANK i.e., TYSNES SPAREBANK and Morgan Stanley go up and down completely randomly.

Pair Corralation between TYSNES SPAREBANK and Morgan Stanley

Assuming the 90 days horizon TYSNES SPAREBANK NK is expected to under-perform the Morgan Stanley. But the stock apears to be less risky and, when comparing its historical volatility, TYSNES SPAREBANK NK is 2.18 times less risky than Morgan Stanley. The stock trades about 0.0 of its potential returns per unit of risk. The Morgan Stanley is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  8,972  in Morgan Stanley on September 5, 2024 and sell it today you would earn a total of  3,482  from holding Morgan Stanley or generate 38.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

TYSNES SPAREBANK NK  vs.  Morgan Stanley

TYSNES SPAREBANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TYSNES SPAREBANK NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TYSNES SPAREBANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Morgan Stanley

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Morgan Stanley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TYSNES SPAREBANK and Morgan Stanley

The main advantage of trading using opposite TYSNES SPAREBANK and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TYSNES SPAREBANK 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.

The idea behind TYSNES SPAREBANK NK and Morgan Stanley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.