Correlation Between Amg Managers and Morgan Stanley

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Can any of the company-specific risk be diversified away by investing in both Amg Managers 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 Amg Managers and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Managers Centersquare and Morgan Stanley European, you can compare the effects of market volatilities on Amg Managers 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 Amg Managers with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Morgan Stanley.

Diversification Opportunities for Amg Managers and Morgan Stanley

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Amg and Morgan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Centersquare and Morgan Stanley European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley European and Amg Managers 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 Amg Managers Centersquare 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 European has no effect on the direction of Amg Managers i.e., Amg Managers and Morgan Stanley go up and down completely randomly.

Pair Corralation between Amg Managers and Morgan Stanley

Assuming the 90 days horizon Amg Managers is expected to generate 14.36 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, Amg Managers Centersquare is 1.01 times less risky than Morgan Stanley. It trades about 0.04 of its potential returns per unit of risk. Morgan Stanley European is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest  2,322  in Morgan Stanley European on September 13, 2024 and sell it today you would earn a total of  190.00  from holding Morgan Stanley European or generate 8.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Amg Managers Centersquare  vs.  Morgan Stanley European

 Performance 
       Timeline  
Amg Managers Centersquare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amg Managers Centersquare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Amg Managers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Morgan Stanley European 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley European are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amg Managers and Morgan Stanley Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amg Managers and Morgan Stanley

The main advantage of trading using opposite Amg Managers and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers 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.
The idea behind Amg Managers Centersquare and Morgan Stanley European pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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