Correlation Between Morgan Stanley and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Dreyfus/standish 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 Dreyfus/standish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Global and Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Morgan Stanley and Dreyfus/standish 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 Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Dreyfus/standish.
Diversification Opportunities for Morgan Stanley and Dreyfus/standish
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Dreyfus/standish is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global 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 Global are associated (or correlated) with Dreyfus/standish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Morgan Stanley and Dreyfus/standish
Assuming the 90 days horizon Morgan Stanley Global is expected to generate 5.29 times more return on investment than Dreyfus/standish. However, Morgan Stanley is 5.29 times more volatile than Dreyfusstandish Global Fixed. It trades about 0.31 of its potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about 0.09 per unit of risk. If you would invest 1,303 in Morgan Stanley Global on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Morgan Stanley Global or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Morgan Stanley Global |
| Dreyfusstandish Global |
Morgan Stanley and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Dreyfus/standish
The main advantage of trading using opposite Morgan Stanley and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Dreyfus/standish 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 Dreyfus/standish will offset losses from the drop in Dreyfus/standish'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 E Portfolio |
| Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus International Bond | Dreyfus/standish vs. Dreyfus International Bond | Dreyfus/standish vs. Dreyfus International Equity |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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