Correlation Between Matthews Emerging and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Matthews Emerging 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 Matthews Emerging and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Emerging Markets and Morgan Stanley Pathway, you can compare the effects of market volatilities on Matthews Emerging 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 Matthews Emerging with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Emerging and Morgan Stanley.
Diversification Opportunities for Matthews Emerging and Morgan Stanley
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Matthews and Morgan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Emerging Markets and Morgan Stanley Pathway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Pathway and Matthews Emerging 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 Matthews Emerging Markets 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 Pathway has no effect on the direction of Matthews Emerging i.e., Matthews Emerging and Morgan Stanley go up and down completely randomly.
Pair Corralation between Matthews Emerging and Morgan Stanley
Given the investment horizon of 90 days Matthews Emerging Markets is expected to under-perform the Morgan Stanley. In addition to that, Matthews Emerging is 1.09 times more volatile than Morgan Stanley Pathway. It trades about -0.12 of its total potential returns per unit of risk. Morgan Stanley Pathway is currently generating about 0.13 per unit of volatility. If you would invest 4,773 in Morgan Stanley Pathway on November 7, 2024 and sell it today you would earn a total of 119.00 from holding Morgan Stanley Pathway or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Emerging Markets vs. Morgan Stanley Pathway
Performance |
| Timeline |
| Matthews Emerging Markets |
| Morgan Stanley Pathway |
Matthews Emerging and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Emerging and Morgan Stanley
The main advantage of trading using opposite Matthews Emerging and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Emerging 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.| Matthews Emerging vs. Matthews China Discovery | Matthews Emerging vs. Morgan Stanley Pathway | Matthews Emerging vs. Neuberger Berman ETF | Matthews Emerging vs. Fidelity Small Mid Cap |
| Morgan Stanley vs. Matthews China Discovery | Morgan Stanley vs. Matthews Emerging Markets | Morgan Stanley vs. Neuberger Berman ETF | Morgan Stanley vs. Fidelity Small Mid Cap |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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