Correlation Between Morgan Stanley and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Putnam Floating 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 Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Institutional and Putnam Floating Rate, you can compare the effects of market volatilities on Morgan Stanley and Putnam Floating 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 Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Putnam Floating.
Diversification Opportunities for Morgan Stanley and Putnam Floating
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Putnam is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate 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 Institutional are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Putnam Floating go up and down completely randomly.
Pair Corralation between Morgan Stanley and Putnam Floating
Assuming the 90 days horizon Morgan Stanley Institutional is expected to generate 5.84 times more return on investment than Putnam Floating. However, Morgan Stanley is 5.84 times more volatile than Putnam Floating Rate. It trades about 0.11 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.19 per unit of risk. If you would invest 862.00 in Morgan Stanley Institutional on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Morgan Stanley Institutional or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Morgan Stanley Institutional vs. Putnam Floating Rate
Performance |
| Timeline |
| Morgan Stanley Insti |
| Putnam Floating Rate |
Morgan Stanley and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Putnam Floating
The main advantage of trading using opposite Morgan Stanley and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Putnam Floating 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 Putnam Floating will offset losses from the drop in Putnam Floating's long position.| Morgan Stanley vs. Realty Income | Morgan Stanley vs. Dynex Capital | Morgan Stanley vs. First Industrial Realty | Morgan Stanley vs. Healthcare Realty Trust |
| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam Floating Rate | Putnam Floating vs. Putnam High Yield |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |