Correlation Between Morgan Stanley and Putnam Managed
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Putnam Managed 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 Managed 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 Managed Municipal, you can compare the effects of market volatilities on Morgan Stanley and Putnam Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Putnam Managed.
Diversification Opportunities for Morgan Stanley and Putnam Managed
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and Putnam is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and Putnam Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Managed Municipal 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 Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Managed Municipal has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Putnam Managed go up and down completely randomly.
Pair Corralation between Morgan Stanley and Putnam Managed
Allowing for the 90-day total investment horizon Morgan Stanley is expected to generate 4.25 times more return on investment than Putnam Managed. However, Morgan Stanley is 4.25 times more volatile than Putnam Managed Municipal. It trades about 0.24 of its potential returns per unit of risk. Putnam Managed Municipal is currently generating about -0.14 per unit of risk. If you would invest 11,735 in Morgan Stanley on August 24, 2024 and sell it today you would earn a total of 1,764 from holding Morgan Stanley or generate 15.03% 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 Managed Municipal
Performance |
| Timeline |
| Morgan Stanley |
| Putnam Managed Municipal |
Morgan Stanley and Putnam Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Putnam Managed
The main advantage of trading using opposite Morgan Stanley and Putnam Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Putnam Managed 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 Managed will offset losses from the drop in Putnam Managed'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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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