Correlation Between Morgan Stanley and Cirrus Logic

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

By analyzing existing cross correlation between Morgan Stanley and Cirrus Logic, you can compare the effects of market volatilities on Morgan Stanley and Cirrus Logic 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 Cirrus Logic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Cirrus Logic.

Diversification Opportunities for Morgan Stanley and Cirrus Logic

0.56

Correlation Coefficient

Morgan Stanley  Cirrus Logic

Very weak diversification

The 3 months correlation between Morgan and Cirrus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Cirrus Logic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirrus Logic 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 are associated (or correlated) with Cirrus Logic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirrus Logic has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Cirrus Logic go up and down completely randomly.

Pair Corralation between Morgan Stanley and Cirrus Logic

Assuming the 90 days horizon Morgan Stanley is expected to generate 1.25 times less return on investment than Cirrus Logic. But when comparing it to its historical volatility, Morgan Stanley is 4.04 times less risky than Cirrus Logic. It trades about 0.13 of its potential returns per unit of risk. Cirrus Logic is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,849  in Cirrus Logic on May 5, 2025 and sell it today you would earn a total of  359.00  from holding Cirrus Logic or generate 3.65% return on investment over 90 days.

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

Morgan Stanley  vs.  Cirrus Logic

Morgan Stanley

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Morgan Stanley is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cirrus Logic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cirrus Logic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cirrus Logic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Morgan Stanley and Cirrus Logic

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

The idea behind Morgan Stanley and Cirrus Logic 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.