Correlation Between Morgan Stanley and Oppenheimer International

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

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

Diversification Opportunities for Morgan Stanley and Oppenheimer International

0.55

Correlation Coefficient

Morgan Stanley  Oppenheimer International

Very weak diversification

The 3 months correlation between Morgan and Oppenheimer is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Government and Oppenheimer International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer International 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 Government are associated (or correlated) with Oppenheimer International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer International has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Oppenheimer International go up and down completely randomly.

Pair Corralation between Morgan Stanley and Oppenheimer International

Assuming the 90 days horizon Morgan Stanley Government is expected to generate 0.91 times more return on investment than Oppenheimer International. However, Morgan Stanley Government is 1.1 times less risky than Oppenheimer International. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer International Growth is currently generating about 0.03 per unit of risk. If you would invest  645.00  in Morgan Stanley Government on December 30, 2024 and sell it today you would earn a total of  45.00  from holding Morgan Stanley Government or generate 6.98% return on investment over 90 days.

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

Morgan Stanley Government  vs.  Oppenheimer International Grow

Morgan Stanley Government

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Government are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oppenheimer International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer International Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Morgan Stanley and Oppenheimer International

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

The idea behind Morgan Stanley Government and Oppenheimer International Growth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.