Correlation Between Morgan Stanley and Ashmore Group
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Ashmore Group 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 Ashmore Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley India and Ashmore Group Plc, you can compare the effects of market volatilities on Morgan Stanley and Ashmore Group 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 Ashmore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Ashmore Group.
Diversification Opportunities for Morgan Stanley and Ashmore Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Morgan and Ashmore is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley India and Ashmore Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Group Plc 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 India are associated (or correlated) with Ashmore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Group Plc has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Ashmore Group go up and down completely randomly.
Pair Corralation between Morgan Stanley and Ashmore Group
Considering the 90-day investment horizon Morgan Stanley India is expected to generate 1.02 times more return on investment than Ashmore Group. However, Morgan Stanley is 1.02 times more volatile than Ashmore Group Plc. It trades about -0.04 of its potential returns per unit of risk. Ashmore Group Plc is currently generating about -0.17 per unit of risk. If you would invest 2,525 in Morgan Stanley India on December 28, 2024 and sell it today you would lose (71.00) from holding Morgan Stanley India or give up 2.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
Morgan Stanley India vs. Ashmore Group Plc
Performance |
Timeline |
Morgan Stanley India |
Ashmore Group Plc |
Morgan Stanley and Ashmore Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Morgan Stanley and Ashmore Group
The main advantage of trading using opposite Morgan Stanley and Ashmore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Ashmore Group 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 Ashmore Group will offset losses from the drop in Ashmore Group's long position.Morgan Stanley vs. Aberdeen Income Credit | Morgan Stanley vs. BlackRock Utility Infrastructure | Morgan Stanley vs. Aberdeen Australia Ef | Morgan Stanley vs. Pgim High Yield |
Ashmore Group vs. Morgan Stanley China | Ashmore Group vs. Central Europe Russia | Ashmore Group vs. Morgan Stanley India | Ashmore Group vs. Nuveen Missouri Quality |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |