Correlation Between Morgan Stanley and American Mutual
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and American Mutual 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 American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Institutional and American Mutual Fund, you can compare the effects of market volatilities on Morgan Stanley and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and American Mutual.
Diversification Opportunities for Morgan Stanley and American Mutual
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Morgan and American is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Institutional are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and American Mutual go up and down completely randomly.
Pair Corralation between Morgan Stanley and American Mutual
If you would invest 5,907 in American Mutual Fund on August 31, 2024 and sell it today you would earn a total of 129.00 from holding American Mutual Fund or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Institutional vs. American Mutual Fund
Performance |
| Timeline |
| Morgan Stanley Insti |
| American Mutual |
Morgan Stanley and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and American Mutual
The main advantage of trading using opposite Morgan Stanley and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Morgan Stanley vs. Rbb Fund | Morgan Stanley vs. Bbh Partner Fund | Morgan Stanley vs. Ab Value Fund | Morgan Stanley vs. Growth Opportunities Fund |
| American Mutual vs. Commonwealth Global Fund | American Mutual vs. Wisdomtree Siegel Global | American Mutual vs. Barings Global Floating | American Mutual vs. Kinetics Global Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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