Correlation Between Morgan Stanley and Dunham Dynamic
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Dunham Dynamic 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 Dunham Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Emerging and Dunham Dynamic Macro, you can compare the effects of market volatilities on Morgan Stanley and Dunham Dynamic 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 Dunham Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Dunham Dynamic.
Diversification Opportunities for Morgan Stanley and Dunham Dynamic
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Dunham is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Emerging and Dunham Dynamic Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Dynamic Macro 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 Emerging are associated (or correlated) with Dunham Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Dynamic Macro has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Dunham Dynamic go up and down completely randomly.
Pair Corralation between Morgan Stanley and Dunham Dynamic
Assuming the 90 days horizon Morgan Stanley Emerging is expected to under-perform the Dunham Dynamic. In addition to that, Morgan Stanley is 1.72 times more volatile than Dunham Dynamic Macro. It trades about -0.23 of its total potential returns per unit of risk. Dunham Dynamic Macro is currently generating about 0.11 per unit of volatility. If you would invest 1,228 in Dunham Dynamic Macro on September 5, 2024 and sell it today you would earn a total of 14.00 from holding Dunham Dynamic Macro or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Emerging vs. Dunham Dynamic Macro
Performance |
| Timeline |
| Morgan Stanley Emerging |
| Dunham Dynamic Macro |
Morgan Stanley and Dunham Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Dunham Dynamic
The main advantage of trading using opposite Morgan Stanley and Dunham Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Dunham Dynamic 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 Dunham Dynamic will offset losses from the drop in Dunham Dynamic's long position.| Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard 500 Index | Morgan Stanley vs. Vanguard Total Stock | Morgan Stanley vs. Vanguard Total Stock |
| Dunham Dynamic vs. Transamerica Emerging Markets | Dunham Dynamic vs. Morgan Stanley Emerging | Dunham Dynamic vs. Ep Emerging Markets | Dunham Dynamic vs. Shelton Emerging Markets |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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