Correlation Between Morgan Stanley and Franklin
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Franklin 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 Franklin 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 Franklin Government Money, you can compare the effects of market volatilities on Morgan Stanley and Franklin 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 Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Franklin.
Diversification Opportunities for Morgan Stanley and Franklin
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Morgan and Franklin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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 Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Franklin go up and down completely randomly.
Pair Corralation between Morgan Stanley and Franklin
Assuming the 90 days horizon Morgan Stanley Global is expected to generate 7.8 times more return on investment than Franklin. However, Morgan Stanley is 7.8 times more volatile than Franklin Government Money. It trades about 0.04 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 1,125 in Morgan Stanley Global on August 24, 2024 and sell it today you would earn a total of 243.00 from holding Morgan Stanley Global or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Franklin Government Money
Performance |
| Timeline |
| Morgan Stanley Global |
| Franklin Government Money |
Morgan Stanley and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Franklin
The main advantage of trading using opposite Morgan Stanley and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Franklin 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 Franklin will offset losses from the drop in Franklin's long position.| Morgan Stanley vs. Emerging Markets Fund | Morgan Stanley vs. International Growth Fund | Morgan Stanley vs. Heritage Fund Investor | Morgan Stanley vs. Select Fund Investor |
| Franklin vs. Rbb Fund Trust | Franklin vs. Barings Global Floating | Franklin vs. Kinetics Global Fund | Franklin vs. Morgan Stanley Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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