Correlation Between SPDR MSCI and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI 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 SPDR MSCI and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Emerging and Morgan Stanley ETF, you can compare the effects of market volatilities on SPDR MSCI 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 SPDR MSCI with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Morgan Stanley.
Diversification Opportunities for SPDR MSCI and Morgan Stanley
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Morgan is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Emerging and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF and SPDR MSCI 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 SPDR MSCI Emerging 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 ETF has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Morgan Stanley go up and down completely randomly.
Pair Corralation between SPDR MSCI and Morgan Stanley
Given the investment horizon of 90 days SPDR MSCI Emerging is expected to under-perform the Morgan Stanley. In addition to that, SPDR MSCI is 1.38 times more volatile than Morgan Stanley ETF. It trades about -0.16 of its total potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.03 per unit of volatility. If you would invest 5,741 in Morgan Stanley ETF on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Morgan Stanley ETF or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI Emerging vs. Morgan Stanley ETF
Performance |
| Timeline |
| SPDR MSCI Emerging |
| Morgan Stanley ETF |
SPDR MSCI and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and Morgan Stanley
The main advantage of trading using opposite SPDR MSCI and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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.| SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR DoubleLine Emerging | SPDR MSCI vs. SPDR MSCI EAFE |
| Morgan Stanley vs. iShares Core SP | Morgan Stanley vs. iShares Core 1 5 | Morgan Stanley vs. iShares Core MSCI | Morgan Stanley vs. iShares Core MSCI |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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