Correlation Between ATT and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Morgan Stanley Counterpoint, you can compare the effects of market volatilities on ATT 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 ATT with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Morgan Stanley.
Diversification Opportunities for ATT and Morgan Stanley
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Morgan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Morgan Stanley Counterpoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Count and ATT 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 ATT Inc 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 Count has no effect on the direction of ATT i.e., ATT and Morgan Stanley go up and down completely randomly.
Pair Corralation between ATT and Morgan Stanley
Taking into account the 90-day investment horizon ATT Inc is expected to generate 1.01 times more return on investment than Morgan Stanley. However, ATT is 1.01 times more volatile than Morgan Stanley Counterpoint. It trades about 0.12 of its potential returns per unit of risk. Morgan Stanley Counterpoint is currently generating about 0.07 per unit of risk. If you would invest 1,594 in ATT Inc on September 3, 2024 and sell it today you would earn a total of 676.00 from holding ATT Inc or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 74.9% |
| Values | Daily Returns |
ATT Inc vs. Morgan Stanley Counterpoint
Performance |
| Timeline |
| ATT Inc |
| Morgan Stanley Count |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATT and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Morgan Stanley
The main advantage of trading using opposite ATT and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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