Correlation Between Morgan Stanley and Ashmore Group
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Ashmore Group 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 Ashmore Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley China and Ashmore Group Plc, you can compare the effects of market volatilities on Morgan Stanley and Ashmore Group 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 Ashmore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Ashmore Group.
Diversification Opportunities for Morgan Stanley and Ashmore Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Morgan and Ashmore is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley China and Ashmore Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Group Plc 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 China are associated (or correlated) with Ashmore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Group Plc has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Ashmore Group go up and down completely randomly.
Pair Corralation between Morgan Stanley and Ashmore Group
Considering the 90-day investment horizon Morgan Stanley China is expected to under-perform the Ashmore Group. But the fund apears to be less risky and, when comparing its historical volatility, Morgan Stanley China is 4.07 times less risky than Ashmore Group. The fund trades about -0.01 of its potential returns per unit of risk. The Ashmore Group Plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Ashmore Group Plc on November 1, 2024 and sell it today you would lose (122.00) from holding Ashmore Group Plc or give up 39.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.43% |
| Values | Daily Returns |
Morgan Stanley China vs. Ashmore Group Plc
Performance |
| Timeline |
| Morgan Stanley China |
| Ashmore Group Plc |
Morgan Stanley and Ashmore Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Ashmore Group
The main advantage of trading using opposite Morgan Stanley and Ashmore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Ashmore Group 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 Ashmore Group will offset losses from the drop in Ashmore Group's long position.| Morgan Stanley vs. Central Europe Russia | Morgan Stanley vs. Morgan Stanley India | Morgan Stanley vs. Ashmore Group Plc | Morgan Stanley vs. Nuveen Missouri Quality |
| Ashmore Group vs. Morgan Stanley China | Ashmore Group vs. Central Europe Russia | Ashmore Group vs. Morgan Stanley India | Ashmore Group vs. Nuveen Missouri Quality |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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