Correlation Between SP Global and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both SP Global and Morgan Stanley 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 SP Global and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Morgan Stanley, you can compare the effects of market volatilities on SP Global and Morgan Stanley 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 SP Global with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Morgan Stanley.
Diversification Opportunities for SP Global and Morgan Stanley
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MHL and Morgan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and SP Global 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 SP Global are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley has no effect on the direction of SP Global i.e., SP Global and Morgan Stanley go up and down completely randomly.
Pair Corralation between SP Global and Morgan Stanley
Assuming the 90 days horizon SP Global is expected to generate 0.95 times more return on investment than Morgan Stanley. However, SP Global is 1.06 times less risky than Morgan Stanley. It trades about -0.19 of its potential returns per unit of risk. Morgan Stanley is currently generating about -0.32 per unit of risk. If you would invest 48,999 in SP Global on September 25, 2024 and sell it today you would lose (2,504) from holding SP Global or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. Morgan Stanley
Performance |
| Timeline |
| SP Global |
| Morgan Stanley |
SP Global and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Morgan Stanley
The main advantage of trading using opposite SP Global and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| SP Global vs. Morgan Stanley | SP Global vs. Morgan Stanley | SP Global vs. The Charles Schwab | SP Global vs. The Goldman Sachs |
| Morgan Stanley vs. Morgan Stanley | Morgan Stanley vs. The Charles Schwab | Morgan Stanley vs. The Goldman Sachs | Morgan Stanley vs. SP 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |