Correlation Between Dunham Large and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Dunham Large 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 Dunham Large and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Morgan Stanley China, you can compare the effects of market volatilities on Dunham Large 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 Dunham Large with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Morgan Stanley.
Diversification Opportunities for Dunham Large and Morgan Stanley
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Morgan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China and Dunham Large 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 Dunham Large Cap 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 China has no effect on the direction of Dunham Large i.e., Dunham Large and Morgan Stanley go up and down completely randomly.
Pair Corralation between Dunham Large and Morgan Stanley
Assuming the 90 days horizon Dunham Large Cap is expected to under-perform the Morgan Stanley. In addition to that, Dunham Large is 1.46 times more volatile than Morgan Stanley China. It trades about -0.06 of its total potential returns per unit of risk. Morgan Stanley China is currently generating about -0.05 per unit of volatility. If you would invest 1,544 in Morgan Stanley China on October 22, 2024 and sell it today you would lose (15.00) from holding Morgan Stanley China or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. Morgan Stanley China
Performance |
| Timeline |
| Dunham Large Cap |
| Morgan Stanley China |
Dunham Large and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Morgan Stanley
The main advantage of trading using opposite Dunham Large and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large 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.| Dunham Large vs. Extended Market Index | Dunham Large vs. Legg Mason Partners | Dunham Large vs. Calvert Developed Market | Dunham Large vs. T Rowe Price |
| Morgan Stanley vs. Barings Emerging Markets | Morgan Stanley vs. Ab All Market | Morgan Stanley vs. Sp Midcap Index | Morgan Stanley vs. Extended Market Index |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |