Correlation Between Morgan Stanley and IShares AEX
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and IShares AEX 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 IShares AEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Direct and iShares AEX UCITS, you can compare the effects of market volatilities on Morgan Stanley and IShares AEX 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 IShares AEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and IShares AEX.
Diversification Opportunities for Morgan Stanley and IShares AEX
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and IShares is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and iShares AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AEX UCITS 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 Direct are associated (or correlated) with IShares AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AEX UCITS has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and IShares AEX go up and down completely randomly.
Pair Corralation between Morgan Stanley and IShares AEX
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.54 times more return on investment than IShares AEX. However, Morgan Stanley is 1.54 times more volatile than iShares AEX UCITS. It trades about 0.33 of its potential returns per unit of risk. iShares AEX UCITS is currently generating about 0.25 per unit of risk. If you would invest 1,996 in Morgan Stanley Direct on September 13, 2024 and sell it today you would earn a total of 143.00 from holding Morgan Stanley Direct or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Morgan Stanley Direct vs. iShares AEX UCITS
Performance |
| Timeline |
| Morgan Stanley Direct |
| iShares AEX UCITS |
Morgan Stanley and IShares AEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and IShares AEX
The main advantage of trading using opposite Morgan Stanley and IShares AEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, IShares AEX 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 IShares AEX will offset losses from the drop in IShares AEX's long position.| Morgan Stanley vs. Tesla Inc | Morgan Stanley vs. Genfit | Morgan Stanley vs. Pinterest | Morgan Stanley vs. Tarsus Pharmaceuticals |
| IShares AEX vs. Vanguard SP 500 | IShares AEX vs. iShares II Public | IShares AEX vs. Vanguard FTSE All World | IShares AEX vs. iShares SP 500 |
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
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| 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 | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |