Correlation Between Gabelli Utility and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Gabelli Utility 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 Gabelli Utility and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Utility Closed and Morgan Stanley China, you can compare the effects of market volatilities on Gabelli Utility 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 Gabelli Utility with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and Morgan Stanley.
Diversification Opportunities for Gabelli Utility and Morgan Stanley
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gabelli and Morgan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China and Gabelli Utility 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 Gabelli Utility Closed 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 China has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Morgan Stanley go up and down completely randomly.
Pair Corralation between Gabelli Utility and Morgan Stanley
Considering the 90-day investment horizon Gabelli Utility is expected to generate 1.73 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, Gabelli Utility Closed is 1.13 times less risky than Morgan Stanley. It trades about 0.04 of its potential returns per unit of risk. Morgan Stanley China is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Morgan Stanley China on December 3, 2024 and sell it today you would earn a total of 55.00 from holding Morgan Stanley China or generate 4.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gabelli Utility Closed vs. Morgan Stanley China
Performance |
Timeline |
Gabelli Utility Closed |
Morgan Stanley China |
Gabelli Utility and Morgan Stanley Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gabelli Utility and Morgan Stanley
The main advantage of trading using opposite Gabelli Utility and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility 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.Gabelli Utility vs. Gabelli Convertible And | Gabelli Utility vs. Gabelli Equity Trust | Gabelli Utility vs. Gabelli Healthcare WellnessRx | Gabelli Utility vs. GAMCO Natural Resources |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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