Correlation Between Angel Oak and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Angel Oak 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 Angel Oak and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Ultrashort and Morgan Stanley Institutional, you can compare the effects of market volatilities on Angel Oak 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 Angel Oak with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Morgan Stanley.
Diversification Opportunities for Angel Oak and Morgan Stanley
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Morgan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Morgan Stanley Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Insti and Angel Oak 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 Angel Oak Ultrashort 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 Insti has no effect on the direction of Angel Oak i.e., Angel Oak and Morgan Stanley go up and down completely randomly.
Pair Corralation between Angel Oak and Morgan Stanley
Assuming the 90 days horizon Angel Oak Ultrashort is not expected to generate positive returns. However, Angel Oak Ultrashort is 26.77 times less risky than Morgan Stanley. It waists most of its returns potential to compensate for thr risk taken. Morgan Stanley is generating about 0.06 per unit of risk. If you would invest 876.00 in Morgan Stanley Institutional on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Morgan Stanley Institutional or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Morgan Stanley Institutional
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Morgan Stanley Insti |
Angel Oak and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Morgan Stanley
The main advantage of trading using opposite Angel Oak and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak 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.| Angel Oak vs. Virtus High Yield | Angel Oak vs. Blackrock High Yield | Angel Oak vs. Siit High Yield | Angel Oak vs. Pace High Yield |
| Morgan Stanley vs. Emerging Markets Equity | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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