Correlation Between Ashmore Emerging and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Ashmore 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 Ashmore 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 Ashmore Emerging Markets and Morgan Stanley Government, you can compare the effects of market volatilities on Ashmore 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 Ashmore Emerging with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Morgan Stanley.
Diversification Opportunities for Ashmore Emerging and Morgan Stanley
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Morgan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Morgan Stanley Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Government and Ashmore 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 Ashmore 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 Government has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Morgan Stanley go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Morgan Stanley
Assuming the 90 days horizon Ashmore Emerging Markets is expected to generate 0.74 times more return on investment than Morgan Stanley. However, Ashmore Emerging Markets is 1.34 times less risky than Morgan Stanley. It trades about 0.16 of its potential returns per unit of risk. Morgan Stanley Government is currently generating about 0.12 per unit of risk. If you would invest 815.00 in Ashmore Emerging Markets on August 29, 2024 and sell it today you would earn a total of 63.00 from holding Ashmore Emerging Markets or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Morgan Stanley Government
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Morgan Stanley Government |
Ashmore Emerging and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Morgan Stanley
The main advantage of trading using opposite Ashmore Emerging and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore 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.| Ashmore Emerging vs. Ab Discovery Value | Ashmore Emerging vs. Applied Finance Explorer | Ashmore Emerging vs. Vanguard Small Cap Value | Ashmore Emerging vs. Boston Partners Small |
| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard 500 Index | Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard Total Stock |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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