Correlation Between Morgan Stanley and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Fidelity Freedom 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 Fidelity Freedom 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 Fidelity Freedom 2015, you can compare the effects of market volatilities on Morgan Stanley and Fidelity Freedom 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 Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Fidelity Freedom.
Diversification Opportunities for Morgan Stanley and Fidelity Freedom
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Morgan and Fidelity is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Emerging and Fidelity Freedom 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2015 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 Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom 2015 has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Morgan Stanley and Fidelity Freedom
Assuming the 90 days horizon Morgan Stanley Emerging is expected to under-perform the Fidelity Freedom. In addition to that, Morgan Stanley is 1.33 times more volatile than Fidelity Freedom 2015. It trades about -0.07 of its total potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about 0.24 per unit of volatility. If you would invest 1,177 in Fidelity Freedom 2015 on September 5, 2024 and sell it today you would earn a total of 21.00 from holding Fidelity Freedom 2015 or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Emerging vs. Fidelity Freedom 2015
Performance |
| Timeline |
| Morgan Stanley Emerging |
| Fidelity Freedom 2015 |
Morgan Stanley and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Fidelity Freedom
The main advantage of trading using opposite Morgan Stanley and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom'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 |
| Fidelity Freedom vs. Oklahoma College Savings | Fidelity Freedom vs. Templeton Developing Markets | Fidelity Freedom vs. Morgan Stanley Emerging | Fidelity Freedom vs. Mondrian 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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