Correlation Between Morgan Stanley and Putnam Short
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Putnam Short 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 Putnam Short 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 Putnam Short Duration, you can compare the effects of market volatilities on Morgan Stanley and Putnam Short 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 Putnam Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Putnam Short.
Diversification Opportunities for Morgan Stanley and Putnam Short
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Putnam is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Putnam Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration 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 Putnam Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Duration has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Putnam Short go up and down completely randomly.
Pair Corralation between Morgan Stanley and Putnam Short
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 17.25 times more return on investment than Putnam Short. However, Morgan Stanley is 17.25 times more volatile than Putnam Short Duration. It trades about 0.03 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.21 per unit of risk. If you would invest 1,907 in Morgan Stanley Direct on September 23, 2024 and sell it today you would earn a total of 177.00 from holding Morgan Stanley Direct or generate 9.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 46.68% |
Values | Daily Returns |
Morgan Stanley Direct vs. Putnam Short Duration
Performance |
Timeline |
Morgan Stanley Direct |
Putnam Short Duration |
Morgan Stanley and Putnam Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Putnam Short
The main advantage of trading using opposite Morgan Stanley and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Putnam Short 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 Putnam Short will offset losses from the drop in Putnam Short'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 |
Putnam Short vs. Putnam Equity Income | Putnam Short vs. Putnam Tax Exempt | Putnam Short vs. Putnam Floating Rate | Putnam Short vs. Putnam High Yield |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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