Correlation Between Morgan Stanley and ISharesGlobal 100
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and ISharesGlobal 100 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 ISharesGlobal 100 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 iSharesGlobal 100, you can compare the effects of market volatilities on Morgan Stanley and ISharesGlobal 100 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 ISharesGlobal 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and ISharesGlobal 100.
Diversification Opportunities for Morgan Stanley and ISharesGlobal 100
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morgan and ISharesGlobal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and iSharesGlobal 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSharesGlobal 100 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 ISharesGlobal 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSharesGlobal 100 has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and ISharesGlobal 100 go up and down completely randomly.
Pair Corralation between Morgan Stanley and ISharesGlobal 100
Given the investment horizon of 90 days Morgan Stanley Direct is expected to under-perform the ISharesGlobal 100. In addition to that, Morgan Stanley is 1.56 times more volatile than iSharesGlobal 100. It trades about 0.0 of its total potential returns per unit of risk. iSharesGlobal 100 is currently generating about 0.49 per unit of volatility. If you would invest 15,109 in iSharesGlobal 100 on September 24, 2024 and sell it today you would earn a total of 1,114 from holding iSharesGlobal 100 or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Direct vs. iSharesGlobal 100
Performance |
| Timeline |
| Morgan Stanley Direct |
| iSharesGlobal 100 |
Morgan Stanley and ISharesGlobal 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and ISharesGlobal 100
The main advantage of trading using opposite Morgan Stanley and ISharesGlobal 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, ISharesGlobal 100 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 ISharesGlobal 100 will offset losses from the drop in ISharesGlobal 100's long position.| Morgan Stanley vs. Uranium Energy Corp | Morgan Stanley vs. Alaska Air Group | Morgan Stanley vs. Coursera | Morgan Stanley vs. Four Seasons Education |
| ISharesGlobal 100 vs. iShares MSCI Emerging | ISharesGlobal 100 vs. Global X Hydrogen | ISharesGlobal 100 vs. Janus Henderson Sustainable | ISharesGlobal 100 vs. JPMorgan Equity Premium |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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