Correlation Between Morgan Stanley and Dreyfus Sustainable

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

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

Diversification Opportunities for Morgan Stanley and Dreyfus Sustainable

0.64

Correlation Coefficient

Morgan Stanley  Dreyfus Sustainable

Poor diversification

The 3 months correlation between Morgan and Dreyfus is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley European and The Dreyfus Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Dreyfus Sustainable 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 European are associated (or correlated) with Dreyfus Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Dreyfus Sustainable has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Dreyfus Sustainable go up and down completely randomly.

Pair Corralation between Morgan Stanley and Dreyfus Sustainable

Assuming the 90 days horizon Morgan Stanley European is expected to under-perform the Dreyfus Sustainable. In addition to that, Morgan Stanley is 1.18 times more volatile than The Dreyfus Sustainable. It trades about -0.04 of its total potential returns per unit of risk. The Dreyfus Sustainable is currently generating about 0.25 per unit of volatility. If you would invest  1,800  in The Dreyfus Sustainable on May 4, 2025 and sell it today you would earn a total of  227.00  from holding The Dreyfus Sustainable or generate 12.61% return on investment over 90 days.

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

Morgan Stanley European  vs.  The Dreyfus Sustainable

Morgan Stanley European

Risk-Adjusted Performance

Very Weak

Over the last 90 days Morgan Stanley European has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Dreyfus Sustainable

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Dreyfus Sustainable are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Dreyfus Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Morgan Stanley and Dreyfus Sustainable

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

The idea behind Morgan Stanley European and The Dreyfus Sustainable 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.