Correlation Between Morgan Stanley and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and SSgA SPDR 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 SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Direct and SSgA SPDR ETFs, you can compare the effects of market volatilities on Morgan Stanley and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and SSgA SPDR.
Diversification Opportunities for Morgan Stanley and SSgA SPDR
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Morgan and SSgA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 Direct are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and SSgA SPDR go up and down completely randomly.
Pair Corralation between Morgan Stanley and SSgA SPDR
Given the investment horizon of 90 days Morgan Stanley is expected to generate 1.09 times less return on investment than SSgA SPDR. In addition to that, Morgan Stanley is 2.11 times more volatile than SSgA SPDR ETFs. It trades about 0.03 of its total potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.06 per unit of volatility. If you would invest 3,527 in SSgA SPDR ETFs on December 4, 2024 and sell it today you would earn a total of 778.00 from holding SSgA SPDR ETFs or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.27% |
| Values | Daily Returns |
Morgan Stanley Direct vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Morgan Stanley Direct |
| SSgA SPDR ETFs |
Morgan Stanley and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and SSgA SPDR
The main advantage of trading using opposite Morgan Stanley and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Morgan Stanley vs. WPP PLC ADR | Morgan Stanley vs. Townsquare Media | Morgan Stanley vs. CenterPoint Energy | Morgan Stanley vs. ZW Data Action |
| SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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