Correlation Between Morgan Stanley and Western Asset
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Government and Western Asset Inflation, you can compare the effects of market volatilities on Morgan Stanley and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Western Asset.
Diversification Opportunities for Morgan Stanley and Western Asset
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Morgan and WESTERN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Government and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Government are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Western Asset go up and down completely randomly.
Pair Corralation between Morgan Stanley and Western Asset
If you would invest 100.00 in Morgan Stanley Government on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Morgan Stanley Government or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Government vs. Western Asset Inflation
Performance |
| Timeline |
| Morgan Stanley Government |
| Western Asset Inflation |
Morgan Stanley and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Western Asset
The main advantage of trading using opposite Morgan Stanley and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard 500 Index | Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard Total Stock |
| Western Asset vs. Morgan Stanley Government | Western Asset vs. Dreyfus Institutional Reserves | Western Asset vs. Massmutual Premier Funds | Western Asset vs. Institutional Fiduciary Trust |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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