Correlation Between Morgan Stanley and Lazard Enhanced
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Lazard Enhanced 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 Lazard Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Focus and Lazard Enhanced Opportunities, you can compare the effects of market volatilities on Morgan Stanley and Lazard Enhanced 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 Lazard Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Lazard Enhanced.
Diversification Opportunities for Morgan Stanley and Lazard Enhanced
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and Lazard is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Focus and Lazard Enhanced Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Enhanced Oppo 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 Focus are associated (or correlated) with Lazard Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Enhanced Oppo has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Lazard Enhanced go up and down completely randomly.
Pair Corralation between Morgan Stanley and Lazard Enhanced
Assuming the 90 days horizon Morgan Stanley Focus is expected to generate 5.72 times more return on investment than Lazard Enhanced. However, Morgan Stanley is 5.72 times more volatile than Lazard Enhanced Opportunities. It trades about 0.09 of its potential returns per unit of risk. Lazard Enhanced Opportunities is currently generating about 0.29 per unit of risk. If you would invest 829.00 in Morgan Stanley Focus on August 26, 2024 and sell it today you would earn a total of 179.00 from holding Morgan Stanley Focus or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Morgan Stanley Focus vs. Lazard Enhanced Opportunities
Performance |
| Timeline |
| Morgan Stanley Focus |
| Lazard Enhanced Oppo |
Morgan Stanley and Lazard Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Lazard Enhanced
The main advantage of trading using opposite Morgan Stanley and Lazard Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Lazard Enhanced 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 Lazard Enhanced will offset losses from the drop in Lazard Enhanced'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 |
| Lazard Enhanced vs. California High Yield Municipal | Lazard Enhanced vs. Morningstar Municipal Bond | Lazard Enhanced vs. Dws Government Money | Lazard Enhanced vs. Ishares Municipal Bond |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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