Correlation Between Morgan Stanley and Short Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Short Nasdaq-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 Short Nasdaq-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 Short Nasdaq 100 Profund, you can compare the effects of market volatilities on Morgan Stanley and Short Nasdaq-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 Short Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Short Nasdaq-100.
Diversification Opportunities for Morgan Stanley and Short Nasdaq-100
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and Short is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and Short Nasdaq 100 Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Nasdaq 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 Short Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Nasdaq 100 has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Short Nasdaq-100 go up and down completely randomly.
Pair Corralation between Morgan Stanley and Short Nasdaq-100
Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 0.41 times more return on investment than Short Nasdaq-100. However, Morgan Stanley Direct is 2.42 times less risky than Short Nasdaq-100. It trades about -0.05 of its potential returns per unit of risk. Short Nasdaq 100 Profund is currently generating about -0.12 per unit of risk. If you would invest 2,074 in Morgan Stanley Direct on October 15, 2024 and sell it today you would lose (22.00) from holding Morgan Stanley Direct or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Direct vs. Short Nasdaq 100 Profund
Performance |
| Timeline |
| Morgan Stanley Direct |
| Short Nasdaq 100 |
Morgan Stanley and Short Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Short Nasdaq-100
The main advantage of trading using opposite Morgan Stanley and Short Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Short Nasdaq-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 Short Nasdaq-100 will offset losses from the drop in Short Nasdaq-100's long position.| Morgan Stanley vs. Cars Inc | Morgan Stanley vs. Logan Ridge Finance | Morgan Stanley vs. Ameriprise Financial | Morgan Stanley vs. US Global Investors |
| Short Nasdaq-100 vs. Mfs Technology Fund | Short Nasdaq-100 vs. Invesco Technology Fund | Short Nasdaq-100 vs. Towpath Technology | Short Nasdaq-100 vs. Firsthand Technology Opportunities |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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