Correlation Between CIT and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both CIT 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 CIT and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIT Group and Morgan Stanley, you can compare the effects of market volatilities on CIT 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 CIT with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIT and Morgan Stanley.
Diversification Opportunities for CIT and Morgan Stanley
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CIT and Morgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CIT Group and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and CIT 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 CIT Group 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 has no effect on the direction of CIT i.e., CIT and Morgan Stanley go up and down completely randomly.
Pair Corralation between CIT and Morgan Stanley
If you would invest 8,158 in Morgan Stanley on January 24, 2024 and sell it today you would earn a total of 1,051 from holding Morgan Stanley or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CIT Group vs. Morgan Stanley
Performance |
| Timeline |
| CIT Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Morgan Stanley |
CIT and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIT and Morgan Stanley
The main advantage of trading using opposite CIT and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIT 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.| CIT vs. ScanSource | CIT vs. Guangdong Investment Limited | CIT vs. High Performance Beverages | CIT vs. Ambev SA ADR |
| Morgan Stanley vs. JPMorgan Chase Co | Morgan Stanley vs. Wells Fargo | Morgan Stanley vs. Citigroup | Morgan Stanley vs. American Express |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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