Correlation Between Credit Suisse and Morgan Stanley

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

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

Diversification Opportunities for Credit Suisse and Morgan Stanley

0.54

Correlation Coefficient

Credit Suisse  Morgan Stanley

Very weak diversification

The 3 months correlation between Credit and Morgan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Credit Suisse X Links and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF and Credit Suisse 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 Credit Suisse X Links 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 ETF has no effect on the direction of Credit Suisse i.e., Credit Suisse and Morgan Stanley go up and down completely randomly.

Pair Corralation between Credit Suisse and Morgan Stanley

Given the investment horizon of 90 days Credit Suisse X Links is expected to generate 0.91 times more return on investment than Morgan Stanley. However, Credit Suisse X Links is 1.09 times less risky than Morgan Stanley. It trades about 0.14 of its potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.08 per unit of risk. If you would invest  15,069  in Credit Suisse X Links on May 15, 2025 and sell it today you would earn a total of  943.50  from holding Credit Suisse X Links or generate 6.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Credit Suisse X Links  vs.  Morgan Stanley ETF

Credit Suisse X

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse X Links are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Credit Suisse may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Morgan Stanley ETF

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Credit Suisse and Morgan Stanley

The main advantage of trading using opposite Credit Suisse and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Suisse 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 Credit Suisse X Links and Morgan Stanley ETF 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 CEOs Directory module to screen CEOs from public companies around the world.