Correlation Between Barings Emerging and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Barings Emerging 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 Emerging 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 Emerging Markets and Morgan Stanley Emerging, you can compare the effects of market volatilities on Barings Emerging 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 Emerging with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Morgan Stanley.
Diversification Opportunities for Barings Emerging and Morgan Stanley
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Morgan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Morgan Stanley Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Emerging and Barings Emerging 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 Emerging Markets 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 Emerging has no effect on the direction of Barings Emerging i.e., Barings Emerging and Morgan Stanley go up and down completely randomly.
Pair Corralation between Barings Emerging and Morgan Stanley
Assuming the 90 days horizon Barings Emerging Markets is expected to under-perform the Morgan Stanley. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings Emerging Markets is 1.38 times less risky than Morgan Stanley. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Morgan Stanley Emerging is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Morgan Stanley Emerging on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Morgan Stanley Emerging or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Morgan Stanley Emerging
Performance |
| Timeline |
| Barings Emerging Markets |
| Morgan Stanley Emerging |
Barings Emerging and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Morgan Stanley
The main advantage of trading using opposite Barings Emerging and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging 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 Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. SCOR PK |
| Morgan Stanley vs. Cmg Ultra Short | Morgan Stanley vs. Alpine Ultra Short | Morgan Stanley vs. Touchstone Ultra Short | Morgan Stanley vs. Franklin Federal Limited Term |
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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