Correlation Between Morgan Stanley and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Eaton Vance Senior, you can compare the effects of market volatilities on Morgan Stanley and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Eaton Vance.
Diversification Opportunities for Morgan Stanley and Eaton Vance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and Eaton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Senior has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Eaton Vance go up and down completely randomly.
Pair Corralation between Morgan Stanley and Eaton Vance
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 6.1 times more return on investment than Eaton Vance. However, Morgan Stanley is 6.1 times more volatile than Eaton Vance Senior. It trades about 0.24 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.14 per unit of risk. If you would invest 11,820 in Morgan Stanley on August 27, 2024 and sell it today you would earn a total of 1,649 from holding Morgan Stanley or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Eaton Vance Senior
Performance |
| Timeline |
| Morgan Stanley |
| Eaton Vance Senior |
Morgan Stanley and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Eaton Vance
The main advantage of trading using opposite Morgan Stanley and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Morgan Stanley vs. Visa Class A | Morgan Stanley vs. Diamond Hill Investment | Morgan Stanley vs. Distoken Acquisition | Morgan Stanley vs. AllianceBernstein Holding LP |
| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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