Correlation Between Morgan Stanley and Calamos Evolving
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Calamos Evolving 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 Calamos Evolving into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Global and Calamos Evolving World, you can compare the effects of market volatilities on Morgan Stanley and Calamos Evolving 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 Calamos Evolving. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Calamos Evolving.
Diversification Opportunities for Morgan Stanley and Calamos Evolving
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Morgan and Calamos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Calamos Evolving World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Evolving World 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 Global are associated (or correlated) with Calamos Evolving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Evolving World has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Calamos Evolving go up and down completely randomly.
Pair Corralation between Morgan Stanley and Calamos Evolving
Assuming the 90 days horizon Morgan Stanley Global is expected to under-perform the Calamos Evolving. In addition to that, Morgan Stanley is 5.05 times more volatile than Calamos Evolving World. It trades about -0.24 of its total potential returns per unit of risk. Calamos Evolving World is currently generating about -0.09 per unit of volatility. If you would invest 1,793 in Calamos Evolving World on October 9, 2024 and sell it today you would lose (26.00) from holding Calamos Evolving World or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Calamos Evolving World
Performance |
| Timeline |
| Morgan Stanley Global |
| Calamos Evolving World |
Morgan Stanley and Calamos Evolving Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Calamos Evolving
The main advantage of trading using opposite Morgan Stanley and Calamos Evolving positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Calamos Evolving 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 Calamos Evolving will offset losses from the drop in Calamos Evolving's long position.| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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