Correlation Between Morgan Stanley and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Municipal Bond 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 Municipal Bond 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 Municipal Bond Fund, you can compare the effects of market volatilities on Morgan Stanley and Municipal Bond 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 Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Municipal Bond.
Diversification Opportunities for Morgan Stanley and Municipal Bond
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Municipal is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond 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 Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Municipal Bond go up and down completely randomly.
Pair Corralation between Morgan Stanley and Municipal Bond
Assuming the 90 days horizon Morgan Stanley Institutional is expected to generate 3.53 times more return on investment than Municipal Bond. However, Morgan Stanley is 3.53 times more volatile than Municipal Bond Fund. It trades about 0.3 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.19 per unit of risk. If you would invest 1,201 in Morgan Stanley Institutional on September 1, 2024 and sell it today you would earn a total of 83.00 from holding Morgan Stanley Institutional or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Morgan Stanley Institutional vs. Municipal Bond Fund
Performance |
| Timeline |
| Morgan Stanley Insti |
| Municipal Bond |
Morgan Stanley and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Municipal Bond
The main advantage of trading using opposite Morgan Stanley and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Morgan Stanley vs. Wisdomtree Siegel Moderate | Morgan Stanley vs. Lifestyle Ii Moderate | Morgan Stanley vs. Multimanager Lifestyle Moderate | Morgan Stanley vs. Jp Morgan Smartretirement |
| Municipal Bond vs. Emerging Markets Equity | Municipal Bond vs. Global Fixed Income | Municipal Bond vs. Global Fixed Income | Municipal Bond vs. Global Fixed Income |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |