Correlation Between Morgan Stanley and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Citi Trends 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 Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Citi Trends, you can compare the effects of market volatilities on Morgan Stanley and Citi Trends 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 Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Citi Trends.
Diversification Opportunities for Morgan Stanley and Citi Trends
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Morgan and Citi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends 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 are associated (or correlated) with Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Citi Trends go up and down completely randomly.
Pair Corralation between Morgan Stanley and Citi Trends
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 0.59 times more return on investment than Citi Trends. However, Morgan Stanley is 1.71 times less risky than Citi Trends. It trades about 0.15 of its potential returns per unit of risk. Citi Trends is currently generating about -0.04 per unit of risk. If you would invest 9,578 in Morgan Stanley on September 1, 2024 and sell it today you would earn a total of 3,583 from holding Morgan Stanley or generate 37.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Citi Trends
Performance |
| Timeline |
| Morgan Stanley |
| Citi Trends |
Morgan Stanley and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Citi Trends
The main advantage of trading using opposite Morgan Stanley and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Citi Trends 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 Citi Trends will offset losses from the drop in Citi Trends' long position.| Morgan Stanley vs. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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