Correlation Between Morgan Stanley and Opportunity Fund
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Opportunity Fund 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 Morgan Stanley and Opportunity Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Institutional and Opportunity Fund Class, you can compare the effects of market volatilities on Morgan Stanley and Opportunity Fund 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 Morgan Stanley with a short position of Opportunity Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Opportunity Fund.
Diversification Opportunities for Morgan Stanley and Opportunity Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Morgan and Opportunity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and Opportunity Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opportunity Fund Class and Morgan Stanley 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 Morgan Stanley Institutional are associated (or correlated) with Opportunity Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opportunity Fund Class has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Opportunity Fund go up and down completely randomly.
Pair Corralation between Morgan Stanley and Opportunity Fund
Assuming the 90 days horizon Morgan Stanley Institutional is expected to under-perform the Opportunity Fund. In addition to that, Morgan Stanley is 12.49 times more volatile than Opportunity Fund Class. It trades about -0.15 of its total potential returns per unit of risk. Opportunity Fund Class is currently generating about 0.09 per unit of volatility. If you would invest 898.00 in Opportunity Fund Class on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Opportunity Fund Class or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Institutional vs. Opportunity Fund Class
Performance |
| Timeline |
| Morgan Stanley Insti |
| Opportunity Fund Class |
Morgan Stanley and Opportunity Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Opportunity Fund
The main advantage of trading using opposite Morgan Stanley and Opportunity Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Opportunity Fund 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 Opportunity Fund will offset losses from the drop in Opportunity Fund's long position.| Morgan Stanley vs. Emerging Markets Equity | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income |
| Opportunity Fund vs. Hsbc Opportunity Fund | Opportunity Fund vs. American Funds Income | Opportunity Fund vs. 1290 High Yield | Opportunity Fund vs. Money Market Obligations |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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