Correlation Between J Hancock and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both J Hancock 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 J Hancock and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Hancock Ii and Morgan Stanley Global, you can compare the effects of market volatilities on J Hancock 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 J Hancock with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Hancock and Morgan Stanley.
Diversification Opportunities for J Hancock and Morgan Stanley
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JRETX and Morgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding J Hancock Ii and Morgan Stanley Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Global and J Hancock 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 J Hancock Ii 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 Global has no effect on the direction of J Hancock i.e., J Hancock and Morgan Stanley go up and down completely randomly.
Pair Corralation between J Hancock and Morgan Stanley
Assuming the 90 days horizon J Hancock Ii is expected to generate 0.75 times more return on investment than Morgan Stanley. However, J Hancock Ii is 1.33 times less risky than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley Global is currently generating about 0.04 per unit of risk. If you would invest 1,100 in J Hancock Ii on September 1, 2024 and sell it today you would earn a total of 358.00 from holding J Hancock Ii or generate 32.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Hancock Ii vs. Morgan Stanley Global
Performance |
| Timeline |
| J Hancock Ii |
| Morgan Stanley Global |
J Hancock and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Hancock and Morgan Stanley
The main advantage of trading using opposite J Hancock and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Hancock 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.| J Hancock vs. Qs Large Cap | J Hancock vs. Transamerica Large Cap | J Hancock vs. American Mutual Fund | J Hancock vs. M Large Cap |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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