Correlation Between Proshares Russell and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Proshares Russell 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 Proshares Russell and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proshares Russell 2000 and Morgan Stanley ETF, you can compare the effects of market volatilities on Proshares Russell 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 Proshares Russell with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and Morgan Stanley.
Diversification Opportunities for Proshares Russell and Morgan Stanley
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Proshares and Morgan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 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 Proshares Russell 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 Proshares Russell 2000 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 Proshares Russell i.e., Proshares Russell and Morgan Stanley go up and down completely randomly.
Pair Corralation between Proshares Russell and Morgan Stanley
Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 3.73 times more return on investment than Morgan Stanley. However, Proshares Russell is 3.73 times more volatile than Morgan Stanley ETF. It trades about 0.2 of its potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.07 per unit of risk. If you would invest 4,175 in Proshares Russell 2000 on August 29, 2024 and sell it today you would earn a total of 219.00 from holding Proshares Russell 2000 or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proshares Russell 2000 vs. Morgan Stanley ETF
Performance |
| Timeline |
| Proshares Russell 2000 |
| Morgan Stanley ETF |
Proshares Russell and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and Morgan Stanley
The main advantage of trading using opposite Proshares Russell and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell 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.| Proshares Russell vs. Global X Dow | Proshares Russell vs. AdvisorShares STAR Global | Proshares Russell vs. Global X Funds | Proshares Russell vs. FT Vest Dow |
| Morgan Stanley vs. Valued Advisers Trust | Morgan Stanley vs. Columbia Diversified Fixed | Morgan Stanley vs. Principal Exchange Traded Funds | Morgan Stanley vs. Doubleline Etf Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |