Correlation Between Cref Money and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Cref Money and Morgan Stanley 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 Cref Money and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Morgan Stanley Government, you can compare the effects of market volatilities on Cref Money and Morgan Stanley 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 Cref Money with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Morgan Stanley.
Diversification Opportunities for Cref Money and Morgan Stanley
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cref and Morgan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Morgan Stanley Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Government and Cref Money 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 Cref Money Market are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Government has no effect on the direction of Cref Money i.e., Cref Money and Morgan Stanley go up and down completely randomly.
Pair Corralation between Cref Money and Morgan Stanley
Assuming the 90 days trading horizon Cref Money Market is expected to generate 0.03 times more return on investment than Morgan Stanley. However, Cref Money Market is 30.15 times less risky than Morgan Stanley. It trades about 0.79 of its potential returns per unit of risk. Morgan Stanley Government is currently generating about 0.03 per unit of risk. If you would invest 2,695 in Cref Money Market on August 24, 2024 and sell it today you would earn a total of 274.00 from holding Cref Money Market or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.59% |
| Values | Daily Returns |
Cref Money Market vs. Morgan Stanley Government
Performance |
| Timeline |
| Cref Money Market |
| Morgan Stanley Government |
Cref Money and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Morgan Stanley
The main advantage of trading using opposite Cref Money and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| Cref Money vs. Government Securities Fund | Cref Money vs. Invesco Government Fund | Cref Money vs. Blackrock Government Bond | Cref Money vs. Us Government Securities |
| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard 500 Index | Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard Total Stock |
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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