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 Global, 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
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Morgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Morgan Stanley Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Global 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 Global 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 0.41 times more return on investment than Morgan Stanley. However, Balanced Fund Retail is 2.45 times less risky than Morgan Stanley. It trades about 0.1 of its potential returns per unit of risk. Morgan Stanley Global is currently generating about 0.02 per unit of risk. If you would invest 1,204 in Balanced Fund Retail on September 12, 2024 and sell it today you would earn a total of 260.00 from holding Balanced Fund Retail or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Morgan Stanley Global
Performance |
| Timeline |
| Balanced Fund Retail |
| Morgan Stanley Global |
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. Cutler Equity | Morgan Stanley vs. Ms Global Fixed | Morgan Stanley vs. Ab Select Equity | Morgan Stanley vs. Balanced Fund Retail |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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