Correlation Between Barings Global and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Barings Global 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 Global 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 Global Floating and Morgan Stanley Global, you can compare the effects of market volatilities on Barings Global 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 Global with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Morgan Stanley.
Diversification Opportunities for Barings Global and Morgan Stanley
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Morgan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Morgan Stanley Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Global and Barings Global 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 Global Floating 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 Global has no effect on the direction of Barings Global i.e., Barings Global and Morgan Stanley go up and down completely randomly.
Pair Corralation between Barings Global and Morgan Stanley
Assuming the 90 days horizon Barings Global is expected to generate 7.2 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, Barings Global Floating is 8.05 times less risky than Morgan Stanley. It trades about 0.28 of its potential returns per unit of risk. Morgan Stanley Global is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,303 in Morgan Stanley Global on August 24, 2024 and sell it today you would earn a total of 65.00 from holding Morgan Stanley Global or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Morgan Stanley Global
Performance |
| Timeline |
| Barings Global Floating |
| Morgan Stanley Global |
Barings Global and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Morgan Stanley
The main advantage of trading using opposite Barings Global and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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 Global vs. Metropolitan West High | Barings Global vs. Pace High Yield | Barings Global vs. California High Yield Municipal | Barings Global vs. Alliancebernstein Global High |
| Morgan Stanley vs. Emerging Markets Fund | Morgan Stanley vs. International Growth Fund | Morgan Stanley vs. Heritage Fund Investor | Morgan Stanley vs. Select Fund Investor |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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