Correlation Between Morgan Stanley and Payden Limited

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Payden Limited 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 Payden Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Global and Payden Limited Maturity, you can compare the effects of market volatilities on Morgan Stanley and Payden Limited 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 Payden Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Payden Limited.

Diversification Opportunities for Morgan Stanley and Payden Limited

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Morgan and Payden is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Payden Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Limited Maturity 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 Global are associated (or correlated) with Payden Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Limited Maturity has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Payden Limited go up and down completely randomly.

Pair Corralation between Morgan Stanley and Payden Limited

Assuming the 90 days horizon Morgan Stanley Global is expected to under-perform the Payden Limited. In addition to that, Morgan Stanley is 144.35 times more volatile than Payden Limited Maturity. It trades about -0.26 of its total potential returns per unit of risk. Payden Limited Maturity is currently generating about -0.22 per unit of volatility. If you would invest  957.00  in Payden Limited Maturity on October 12, 2024 and sell it today you would lose (1.00) from holding Payden Limited Maturity or give up 0.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Morgan Stanley Global  vs.  Payden Limited Maturity

 Performance 
       Timeline  
Morgan Stanley Global 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Morgan Stanley Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Payden Limited Maturity 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Payden Limited Maturity are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Payden Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Morgan Stanley and Payden Limited Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Morgan Stanley and Payden Limited

The main advantage of trading using opposite Morgan Stanley and Payden Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Payden Limited 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 Payden Limited will offset losses from the drop in Payden Limited's long position.
The idea behind Morgan Stanley Global and Payden Limited Maturity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Money Managers
Screen money managers from public funds and ETFs managed around the world
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format