Correlation Between IShares National and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both IShares National and Morgan Stanley 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 IShares National and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares National Muni and Morgan Stanley ETF, you can compare the effects of market volatilities on IShares National and Morgan Stanley 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 IShares National with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares National and Morgan Stanley.
Diversification Opportunities for IShares National and Morgan Stanley
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Morgan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares National Muni and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF and IShares National 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 iShares National Muni are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley ETF has no effect on the direction of IShares National i.e., IShares National and Morgan Stanley go up and down completely randomly.
Pair Corralation between IShares National and Morgan Stanley
Considering the 90-day investment horizon IShares National is expected to generate 1.31 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, iShares National Muni is 1.16 times less risky than Morgan Stanley. It trades about 0.19 of its potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,217 in Morgan Stanley ETF on November 27, 2024 and sell it today you would earn a total of 57.63 from holding Morgan Stanley ETF or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares National Muni vs. Morgan Stanley ETF
Performance |
| Timeline |
| iShares National Muni |
| Morgan Stanley ETF |
IShares National and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares National and Morgan Stanley
The main advantage of trading using opposite IShares National and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares National position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| IShares National vs. iShares JP Morgan | IShares National vs. iShares iBoxx Investment | IShares National vs. SPDR Nuveen Bloomberg | IShares National vs. VanEck High Yield |
| Morgan Stanley vs. iShares National Muni | Morgan Stanley vs. Vanguard Tax Exempt Bond | Morgan Stanley vs. First Trust Managed | Morgan Stanley vs. VanEck Intermediate Muni |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |