Correlation Between Morgan Stanley and Penta Teknoloji

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

Diversification Opportunities for Morgan Stanley and Penta Teknoloji

0.76

Correlation Coefficient

Morgan Stanley  Penta Teknoloji

Poor diversification

The 3 months correlation between Morgan and Penta is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Penta Teknoloji Urunleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Teknoloji Urunleri 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 Penta Teknoloji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Teknoloji Urunleri has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Penta Teknoloji go up and down completely randomly.

Pair Corralation between Morgan Stanley and Penta Teknoloji

Given the investment horizon of 90 days Morgan Stanley is expected to generate 1.25 times less return on investment than Penta Teknoloji. But when comparing it to its historical volatility, Morgan Stanley Direct is 1.78 times less risky than Penta Teknoloji. It trades about 0.13 of its potential returns per unit of risk. Penta Teknoloji Urunleri is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,390  in Penta Teknoloji Urunleri on October 1, 2024 and sell it today you would earn a total of  133.00  from holding Penta Teknoloji Urunleri or generate 9.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Morgan Stanley Direct  vs.  Penta Teknoloji Urunleri

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.

Penta Teknoloji Urunleri

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Teknoloji Urunleri are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Penta Teknoloji may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Morgan Stanley and Penta Teknoloji

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

The idea behind Morgan Stanley Direct and Penta Teknoloji Urunleri 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.