Correlation Between Morgan Stanley and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Aggressive Growth 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 Aggressive Growth 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 Aggressive Growth Fund, you can compare the effects of market volatilities on Morgan Stanley and Aggressive Growth 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 Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Aggressive Growth.
Diversification Opportunities for Morgan Stanley and Aggressive Growth
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Aggressive is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Aggressive Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth 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 Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Aggressive Growth go up and down completely randomly.
Pair Corralation between Morgan Stanley and Aggressive Growth
Assuming the 90 days horizon Morgan Stanley is expected to generate 1.06 times less return on investment than Aggressive Growth. But when comparing it to its historical volatility, Morgan Stanley Global is 1.19 times less risky than Aggressive Growth. It trades about 0.33 of its potential returns per unit of risk. Aggressive Growth Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 6,745 in Aggressive Growth Fund on September 2, 2024 and sell it today you would earn a total of 436.00 from holding Aggressive Growth Fund or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Aggressive Growth Fund
Performance |
| Timeline |
| Morgan Stanley Global |
| Aggressive Growth |
Morgan Stanley and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Aggressive Growth
The main advantage of trading using opposite Morgan Stanley and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth'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 |
| Aggressive Growth vs. Tax Managed Large Cap | Aggressive Growth vs. Goldman Sachs Large | Aggressive Growth vs. Morningstar Unconstrained Allocation | Aggressive Growth vs. T Rowe Price |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |