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 California, 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
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Eaton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Eaton Vance California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance California 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 California 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 4.69 times more return on investment than Eaton Vance. However, Morgan Stanley is 4.69 times more volatile than Eaton Vance California. It trades about 0.19 of its potential returns per unit of risk. Eaton Vance California is currently generating about 0.02 per unit of risk. If you would invest 10,280 in Morgan Stanley on August 30, 2024 and sell it today you would earn a total of 2,841 from holding Morgan Stanley or generate 27.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Eaton Vance California
Performance |
| Timeline |
| Morgan Stanley |
| Eaton Vance California |
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. Goldman Sachs Group | Morgan Stanley vs. Riot Blockchain | Morgan Stanley vs. Marathon Digital Holdings | Morgan Stanley vs. Applied Blockchain |
| Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Pimco California Municipal | Eaton Vance vs. Nuveen California Amt | Eaton Vance vs. Invesco California Value |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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