Correlation Between Citigroup and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Morgan Stanley ETF, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Morgan Stanley.
Diversification Opportunities for Citigroup and Morgan Stanley
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Morgan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Morgan Stanley go up and down completely randomly.
Pair Corralation between Citigroup and Morgan Stanley
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Morgan Stanley. In addition to that, Citigroup is 2.79 times more volatile than Morgan Stanley ETF. It trades about -0.08 of its total potential returns per unit of risk. Morgan Stanley ETF is currently generating about -0.02 per unit of volatility. If you would invest 2,698 in Morgan Stanley ETF on November 28, 2024 and sell it today you would lose (8.00) from holding Morgan Stanley ETF or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Morgan Stanley ETF
Performance |
| Timeline |
| Citigroup |
| Morgan Stanley ETF |
Citigroup and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Morgan Stanley
The main advantage of trading using opposite Citigroup and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Morgan Stanley vs. Strategy Shares | Morgan Stanley vs. Freedom Day Dividend | Morgan Stanley vs. Franklin Templeton ETF | Morgan Stanley vs. iShares MSCI China |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Transaction History View history of all your transactions and understand their impact on performance |