Correlation Between Barings Active and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Morgan Stanley Institutional, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Morgan Stanley.
Diversification Opportunities for Barings Active and Morgan Stanley
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Morgan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Morgan Stanley Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Insti and Barings Active 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 Barings Active Short 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 Insti has no effect on the direction of Barings Active i.e., Barings Active and Morgan Stanley go up and down completely randomly.
Pair Corralation between Barings Active and Morgan Stanley
Assuming the 90 days horizon Barings Active is expected to generate 1.01 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, Barings Active Short is 7.84 times less risky than Morgan Stanley. It trades about 0.16 of its potential returns per unit of risk. Morgan Stanley Institutional is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Morgan Stanley Institutional on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Morgan Stanley Institutional or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Barings Active Short vs. Morgan Stanley Institutional
Performance |
| Timeline |
| Barings Active Short |
| Morgan Stanley Insti |
Barings Active and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Morgan Stanley
The main advantage of trading using opposite Barings Active and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Blackrock Conservative Prprdptfinstttnl | Barings Active vs. Huber Capital Diversified | Barings Active vs. Delaware Limited Term Diversified | Barings Active vs. Jhancock Diversified Macro |
| Morgan Stanley vs. Barings Active Short | Morgan Stanley vs. Jhancock Short Duration | Morgan Stanley vs. Federated Short Term Income | Morgan Stanley vs. Maryland Short Term Tax Free |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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