Correlation Between Morgan Stanley and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Eaton Vance 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 Eaton Vance 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 Eaton Vance Val, you can compare the effects of market volatilities on Morgan Stanley and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Eaton Vance.
Diversification Opportunities for Morgan Stanley and Eaton Vance
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Eaton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Eaton Vance Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Val 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Val has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Eaton Vance go up and down completely randomly.
Pair Corralation between Morgan Stanley and Eaton Vance
Assuming the 90 days horizon Morgan Stanley is expected to generate 1.12 times less return on investment than Eaton Vance. In addition to that, Morgan Stanley is 1.01 times more volatile than Eaton Vance Val. It trades about 0.22 of its total potential returns per unit of risk. Eaton Vance Val is currently generating about 0.25 per unit of volatility. If you would invest 2,141 in Eaton Vance Val on August 29, 2024 and sell it today you would earn a total of 109.00 from holding Eaton Vance Val or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Eaton Vance Val
Performance |
| Timeline |
| Morgan Stanley Global |
| Eaton Vance Val |
Morgan Stanley and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Eaton Vance
The main advantage of trading using opposite Morgan Stanley and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Morgan Stanley vs. T Rowe Price | Morgan Stanley vs. T Rowe Price | Morgan Stanley vs. HUMANA INC | Morgan Stanley vs. Aquagold International |
| Eaton Vance vs. Morgan Stanley Global | Eaton Vance vs. Us Global Investors | Eaton Vance vs. Massmutual Premier Global | Eaton Vance vs. Artisan Global Unconstrained |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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