Correlation Between Morgan Stanley and New York
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and New York Mortgage, you can compare the effects of market volatilities on Morgan Stanley and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and New York.
Diversification Opportunities for Morgan Stanley and New York
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and New is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and New York go up and down completely randomly.
Pair Corralation between Morgan Stanley and New York
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 1.52 times more return on investment than New York. However, Morgan Stanley is 1.52 times more volatile than New York Mortgage. It trades about 0.2 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.27 per unit of risk. If you would invest 11,700 in Morgan Stanley on August 31, 2024 and sell it today you would earn a total of 1,421 from holding Morgan Stanley or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. New York Mortgage
Performance |
| Timeline |
| Morgan Stanley |
| New York Mortgage |
Morgan Stanley and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and New York
The main advantage of trading using opposite Morgan Stanley and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, New York 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 New York will offset losses from the drop in New York'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 |
| New York vs. Two Harbors Investments | New York vs. ARMOUR Residential REIT | New York vs. Annaly Capital Management | New York vs. AGNC Investment Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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