Correlation Between Morgan Stanley and The Hartford
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and The Hartford 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 The Hartford 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 The Hartford Global, you can compare the effects of market volatilities on Morgan Stanley and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and The Hartford.
Diversification Opportunities for Morgan Stanley and The Hartford
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Morgan and The is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and The Hartford Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and The Hartford go up and down completely randomly.
Pair Corralation between Morgan Stanley and The Hartford
Assuming the 90 days horizon Morgan Stanley Global is expected to generate 1.66 times more return on investment than The Hartford. However, Morgan Stanley is 1.66 times more volatile than The Hartford Global. It trades about 0.23 of its potential returns per unit of risk. The Hartford Global is currently generating about -0.15 per unit of risk. If you would invest 1,303 in Morgan Stanley Global on August 29, 2024 and sell it today you would earn a total of 59.00 from holding Morgan Stanley Global or generate 4.53% 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. The Hartford Global
Performance |
| Timeline |
| Morgan Stanley Global |
| Hartford Global |
Morgan Stanley and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and The Hartford
The main advantage of trading using opposite Morgan Stanley and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford'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 E Portfolio |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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