Correlation Between Morgan Stanley and Celgene

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Celgene 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 Celgene 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 Celgene, you can compare the effects of market volatilities on Morgan Stanley and Celgene 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 Celgene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Celgene.

Diversification Opportunities for Morgan Stanley and Celgene

0.0

Correlation Coefficient

Morgan Stanley  Celgene

Pay attention - limited upside

The 3 months correlation between Morgan and Celgene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Celgene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celgene 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 Celgene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celgene has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Celgene go up and down completely randomly.

Pair Corralation between Morgan Stanley and Celgene

If you would invest  2,127  in Morgan Stanley Direct on October 1, 2024 and sell it today you would earn a total of  5.00  from holding Morgan Stanley Direct or generate 0.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Morgan Stanley Direct  vs.  Celgene

Morgan Stanley Direct

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Celgene

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Morgan Stanley and Celgene

The main advantage of trading using opposite Morgan Stanley and Celgene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Celgene 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 Celgene will offset losses from the drop in Celgene's long position.

The idea behind Morgan Stanley Direct and Celgene 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.