Correlation Between Morgan Stanley and WisdomTree Trust
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and WisdomTree Trust 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 WisdomTree Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley ETF and WisdomTree Trust , you can compare the effects of market volatilities on Morgan Stanley and WisdomTree Trust 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 WisdomTree Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and WisdomTree Trust.
Diversification Opportunities for Morgan Stanley and WisdomTree Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Morgan and WisdomTree is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley ETF and WisdomTree Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Trust 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 ETF are associated (or correlated) with WisdomTree Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Trust has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and WisdomTree Trust go up and down completely randomly.
Pair Corralation between Morgan Stanley and WisdomTree Trust
Given the investment horizon of 90 days Morgan Stanley ETF is expected to generate 0.89 times more return on investment than WisdomTree Trust. However, Morgan Stanley ETF is 1.12 times less risky than WisdomTree Trust. It trades about 0.21 of its potential returns per unit of risk. WisdomTree Trust is currently generating about 0.04 per unit of risk. If you would invest 2,604 in Morgan Stanley ETF on October 22, 2025 and sell it today you would earn a total of 73.00 from holding Morgan Stanley ETF or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley ETF vs. WisdomTree Trust
Performance |
| Timeline |
| Morgan Stanley ETF |
| WisdomTree Trust |
Morgan Stanley and WisdomTree Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and WisdomTree Trust
The main advantage of trading using opposite Morgan Stanley and WisdomTree Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, WisdomTree Trust 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 WisdomTree Trust will offset losses from the drop in WisdomTree Trust's long position.| Morgan Stanley vs. 2023 EFT Series | Morgan Stanley vs. Russell Equity Income | Morgan Stanley vs. OneAscent International Equity | Morgan Stanley vs. JP Morgan Exchange Traded |
| WisdomTree Trust vs. Fidelity Small Mid Factor | WisdomTree Trust vs. ProShares SP MidCap | WisdomTree Trust vs. iShares Russell 2500 | WisdomTree Trust vs. Invesco 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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