Correlation Between Morgan Stanley and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Eaton Vance 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 Eaton Vance 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 Eaton Vance Atlant, you can compare the effects of market volatilities on Morgan Stanley and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Eaton Vance.
Diversification Opportunities for Morgan Stanley and Eaton Vance
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Eaton is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Eaton Vance Atlant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlant 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Atlant has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Eaton Vance go up and down completely randomly.
Pair Corralation between Morgan Stanley and Eaton Vance
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.18 times more return on investment than Eaton Vance. However, Morgan Stanley is 1.18 times more volatile than Eaton Vance Atlant. It trades about 0.15 of its potential returns per unit of risk. Eaton Vance Atlant is currently generating about -0.12 per unit of risk. If you would invest 1,946 in Morgan Stanley Direct on September 23, 2024 and sell it today you would earn a total of 138.00 from holding Morgan Stanley Direct or generate 7.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Morgan Stanley Direct vs. Eaton Vance Atlant
Performance |
Timeline |
Morgan Stanley Direct |
Eaton Vance Atlant |
Morgan Stanley and Eaton Vance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Eaton Vance
The main advantage of trading using opposite Morgan Stanley and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.Morgan Stanley vs. United Rentals | Morgan Stanley vs. HE Equipment Services | Morgan Stanley vs. Triton International Limited | Morgan Stanley vs. Ryanair Holdings PLC |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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