Correlation Between Morgan Stanley and Mh Elite

Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Mh Elite 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 Mh Elite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Morgan Stanley Multi and Mh Elite Fund, you can compare the effects of market volatilities on Morgan Stanley and Mh Elite 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 Mh Elite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Mh Elite.

Diversification Opportunities for Morgan Stanley and Mh Elite

0.52

Correlation Coefficient

Morgan Stanley  Mh Elite

Very weak diversification

The 3 months correlation between Morgan and MHEFX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Multi and Mh Elite Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Fund 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 Multi are associated (or correlated) with Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Fund has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Mh Elite go up and down completely randomly.

Pair Corralation between Morgan Stanley and Mh Elite

Assuming the 90 days horizon Morgan Stanley Multi is expected to generate 1.38 times more return on investment than Mh Elite. However, Morgan Stanley is 1.38 times more volatile than Mh Elite Fund. It trades about -0.07 of its potential returns per unit of risk. Mh Elite Fund is currently generating about -0.14 per unit of risk. If you would invest  1,508  in Morgan Stanley Multi on December 21, 2024 and sell it today you would lose (156.00) from holding Morgan Stanley Multi or give up 10.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Morgan Stanley Multi  vs.  Mh Elite Fund

Morgan Stanley Multi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Morgan Stanley Multi has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mh Elite Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mh Elite Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Morgan Stanley and Mh Elite

The main advantage of trading using opposite Morgan Stanley and Mh Elite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Mh Elite 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 Mh Elite will offset losses from the drop in Mh Elite's long position.

The idea behind Morgan Stanley Multi and Mh Elite Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.