Correlation Between Morgan Stanley and Leisure Fund
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Leisure Fund 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 Leisure Fund 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 Leisure Fund Class, you can compare the effects of market volatilities on Morgan Stanley and Leisure Fund 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 Leisure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Leisure Fund.
Diversification Opportunities for Morgan Stanley and Leisure Fund
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Morgan and Leisure is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Emerging and Leisure Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leisure Fund Class 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 Leisure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leisure Fund Class has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Leisure Fund go up and down completely randomly.
Pair Corralation between Morgan Stanley and Leisure Fund
Assuming the 90 days horizon Morgan Stanley is expected to generate 1.79 times less return on investment than Leisure Fund. But when comparing it to its historical volatility, Morgan Stanley Emerging is 2.08 times less risky than Leisure Fund. It trades about 0.26 of its potential returns per unit of risk. Leisure Fund Class is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 8,498 in Leisure Fund Class on September 13, 2024 and sell it today you would earn a total of 236.00 from holding Leisure Fund Class or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Emerging vs. Leisure Fund Class
Performance |
| Timeline |
| Morgan Stanley Emerging |
| Leisure Fund Class |
Morgan Stanley and Leisure Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Leisure Fund
The main advantage of trading using opposite Morgan Stanley and Leisure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Leisure Fund 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 Leisure Fund will offset losses from the drop in Leisure Fund's long position.| Morgan Stanley vs. Easterly Snow Longshort | Morgan Stanley vs. Quantitative Longshort Equity | Morgan Stanley vs. Angel Oak Ultrashort | Morgan Stanley vs. Boston Partners Longshort |
| Leisure Fund vs. Deutsche Global Inflation | Leisure Fund vs. Loomis Sayles Inflation | Leisure Fund vs. Guidepath Managed Futures | Leisure Fund vs. Ab Bond Inflation |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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