Correlation Between Morgan Stanley and Sit International
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Sit International 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 Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley India and Sit International Growth, you can compare the effects of market volatilities on Morgan Stanley and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Sit International.
Diversification Opportunities for Morgan Stanley and Sit International
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Sit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley India and Sit International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Growth 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 India are associated (or correlated) with Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Growth has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Sit International go up and down completely randomly.
Pair Corralation between Morgan Stanley and Sit International
Considering the 90-day investment horizon Morgan Stanley India is expected to generate 1.12 times more return on investment than Sit International. However, Morgan Stanley is 1.12 times more volatile than Sit International Growth. It trades about 0.11 of its potential returns per unit of risk. Sit International Growth is currently generating about 0.02 per unit of risk. If you would invest 2,480 in Morgan Stanley India on September 1, 2024 and sell it today you would earn a total of 341.00 from holding Morgan Stanley India or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Morgan Stanley India vs. Sit International Growth
Performance |
| Timeline |
| Morgan Stanley India |
| Sit International Growth |
Morgan Stanley and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Sit International
The main advantage of trading using opposite Morgan Stanley and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| Morgan Stanley vs. Aberdeen Income Credit | Morgan Stanley vs. BlackRock Utility Infrastructure | Morgan Stanley vs. Aberdeen Australia Ef | Morgan Stanley vs. Pgim High Yield |
| Sit International vs. Sit Small Cap | Sit International vs. Sit Global Dividend | Sit International vs. Sit Global Dividend | Sit International vs. Sit Small Cap |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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