Correlation Between Morgan Stanley and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Allocation, you can compare the effects of market volatilities on Morgan Stanley and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Mainstay Moderate.
Diversification Opportunities for Morgan Stanley and Mainstay Moderate
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and Mainstay is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Morgan Stanley and Mainstay Moderate
Assuming the 90 days horizon Morgan Stanley is expected to generate 1.69 times less return on investment than Mainstay Moderate. In addition to that, Morgan Stanley is 2.07 times more volatile than Mainstay Moderate Allocation. It trades about 0.03 of its total potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.11 per unit of volatility. If you would invest 1,237 in Mainstay Moderate Allocation on September 2, 2024 and sell it today you would earn a total of 256.00 from holding Mainstay Moderate Allocation or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Morgan Stanley Global |
| Mainstay Moderate |
Morgan Stanley and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Mainstay Moderate
The main advantage of trading using opposite Morgan Stanley and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate'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 |
| Mainstay Moderate vs. Blackrock Inflation Protected | Mainstay Moderate vs. Aqr Managed Futures | Mainstay Moderate vs. Arrow Managed Futures | Mainstay Moderate vs. Cref Inflation Linked 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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