Correlation Between Nasdaq 100 and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Morgan Stanley China, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Morgan Stanley.
Diversification Opportunities for Nasdaq 100 and Morgan Stanley
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nasdaq and Morgan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 China has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Morgan Stanley go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Morgan Stanley
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.61 times more return on investment than Morgan Stanley. However, Nasdaq 100 is 2.61 times more volatile than Morgan Stanley China. It trades about 0.01 of its potential returns per unit of risk. Morgan Stanley China is currently generating about -0.05 per unit of risk. If you would invest 57,764 in Nasdaq 100 2x Strategy on October 23, 2024 and sell it today you would lose (92.00) from holding Nasdaq 100 2x Strategy or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Morgan Stanley China
Performance |
| Timeline |
| Nasdaq 100 2x |
| Morgan Stanley China |
Nasdaq 100 and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Morgan Stanley
The main advantage of trading using opposite Nasdaq 100 and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Sp 500 2x | Nasdaq 100 vs. Inverse Nasdaq 100 2x | Nasdaq 100 vs. Inverse Sp 500 | Nasdaq 100 vs. Ultra Nasdaq 100 Profunds |
| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard 500 Index | Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard Total Stock |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |