Correlation Between Balanced Fund and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Morgan Stanley Institutional, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Morgan Stanley.
Diversification Opportunities for Balanced Fund and Morgan Stanley
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balanced and Morgan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Morgan Stanley Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Insti and Balanced Fund 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 Balanced Fund Retail 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 Insti has no effect on the direction of Balanced Fund i.e., Balanced Fund and Morgan Stanley go up and down completely randomly.
Pair Corralation between Balanced Fund and Morgan Stanley
Assuming the 90 days horizon Balanced Fund Retail is expected to generate 0.61 times more return on investment than Morgan Stanley. However, Balanced Fund Retail is 1.65 times less risky than Morgan Stanley. It trades about 0.1 of its potential returns per unit of risk. Morgan Stanley Institutional is currently generating about -0.07 per unit of risk. If you would invest 1,398 in Balanced Fund Retail on September 3, 2024 and sell it today you would earn a total of 47.00 from holding Balanced Fund Retail or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Morgan Stanley Institutional
Performance |
| Timeline |
| Balanced Fund Retail |
| Morgan Stanley Insti |
Balanced Fund and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Morgan Stanley
The main advantage of trading using opposite Balanced Fund and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
| Morgan Stanley vs. Morgan Stanley Institutional | Morgan Stanley vs. Morgan Stanley Institutional | Morgan Stanley vs. Morgan Stanley Institutional | Morgan Stanley vs. Morgan Stanley Institutional |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |