Correlation Between ProShares and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both ProShares 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 ProShares and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP MidCap and Morgan Stanley ETF, you can compare the effects of market volatilities on ProShares 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 ProShares with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Morgan Stanley.
Diversification Opportunities for ProShares and Morgan Stanley
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ProShares and Morgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP MidCap 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 ProShares 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 ProShares SP MidCap 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 ProShares i.e., ProShares and Morgan Stanley go up and down completely randomly.
Pair Corralation between ProShares and Morgan Stanley
Given the investment horizon of 90 days ProShares is expected to generate 1.13 times less return on investment than Morgan Stanley. In addition to that, ProShares is 1.04 times more volatile than Morgan Stanley ETF. It trades about 0.05 of its total potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.06 per unit of volatility. If you would invest 4,993 in Morgan Stanley ETF on September 3, 2024 and sell it today you would earn a total of 1,419 from holding Morgan Stanley ETF or generate 28.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.54% |
| Values | Daily Returns |
ProShares SP MidCap vs. Morgan Stanley ETF
Performance |
| Timeline |
| ProShares SP MidCap |
| Morgan Stanley ETF |
ProShares and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Morgan Stanley
The main advantage of trading using opposite ProShares and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares 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.| ProShares vs. Horizon Kinetics Inflation | ProShares vs. Virtus ETF Trust | ProShares vs. iShares MSCI USA | ProShares vs. Pacer Cash Cows |
| Morgan Stanley vs. Sonida Senior Living | Morgan Stanley vs. The9 Ltd ADR | Morgan Stanley vs. VanEck Vectors ETF | Morgan Stanley vs. Nine Energy Service |
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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