Correlation Between Morgan Stanley and IShares European
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and IShares European 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 European 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 European Property, you can compare the effects of market volatilities on Morgan Stanley and IShares European 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 European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and IShares European.
Diversification Opportunities for Morgan Stanley and IShares European
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morgan and IShares is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and iShares European Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares European Property 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 European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares European Property has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and IShares European go up and down completely randomly.
Pair Corralation between Morgan Stanley and IShares European
Given the investment horizon of 90 days Morgan Stanley Direct is expected to under-perform the IShares European. In addition to that, Morgan Stanley is 1.05 times more volatile than iShares European Property. It trades about -0.03 of its total potential returns per unit of risk. iShares European Property is currently generating about -0.01 per unit of volatility. If you would invest 2,774 in iShares European Property on October 7, 2024 and sell it today you would lose (70.00) from holding iShares European Property or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Morgan Stanley Direct vs. iShares European Property
Performance |
| Timeline |
| Morgan Stanley Direct |
| iShares European Property |
Morgan Stanley and IShares European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and IShares European
The main advantage of trading using opposite Morgan Stanley and IShares European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, IShares European 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 European will offset losses from the drop in IShares European's long position.| Morgan Stanley vs. U Power Limited | Morgan Stanley vs. Logan Ridge Finance | Morgan Stanley vs. Adient PLC | Morgan Stanley vs. Cars Inc |
| IShares European vs. iShares Corp Bond | IShares European vs. iShares Emerging Asia | IShares European vs. iShares MSCI Global | IShares European vs. iShares Asia Property |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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