Correlation Between Morgan Stanley and Putnam Master
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Putnam Master 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 Putnam Master into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley and Putnam Master Intermediate, you can compare the effects of market volatilities on Morgan Stanley and Putnam Master 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 Putnam Master. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Putnam Master.
Diversification Opportunities for Morgan Stanley and Putnam Master
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Putnam is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Putnam Master Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Master Interm 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 Putnam Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Master Interm has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Putnam Master go up and down completely randomly.
Pair Corralation between Morgan Stanley and Putnam Master
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 5.49 times more return on investment than Putnam Master. However, Morgan Stanley is 5.49 times more volatile than Putnam Master Intermediate. It trades about 0.24 of its potential returns per unit of risk. Putnam Master Intermediate is currently generating about -0.08 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley vs. Putnam Master Intermediate
Performance |
| Timeline |
| Morgan Stanley |
| Putnam Master Interm |
Morgan Stanley and Putnam Master Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Putnam Master
The main advantage of trading using opposite Morgan Stanley and Putnam Master positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Putnam Master 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 Putnam Master will offset losses from the drop in Putnam Master'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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