Correlation Between Morgan Stanley and EXES FUNDO

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

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

Diversification Opportunities for Morgan Stanley and EXES FUNDO

0.64

Correlation Coefficient

Morgan Stanley  EXES FUNDO

Poor diversification

The 3 months correlation between Morgan and EXES is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Direct and EXES FUNDO DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXES FUNDO DE 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 Direct are associated (or correlated) with EXES FUNDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXES FUNDO DE has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and EXES FUNDO go up and down completely randomly.

Pair Corralation between Morgan Stanley and EXES FUNDO

Given the investment horizon of 90 days Morgan Stanley Direct is expected to generate 1.59 times more return on investment than EXES FUNDO. However, Morgan Stanley is 1.59 times more volatile than EXES FUNDO DE. It trades about 0.14 of its potential returns per unit of risk. EXES FUNDO DE is currently generating about 0.09 per unit of risk. If you would invest  1,953  in Morgan Stanley Direct on September 15, 2024 and sell it today you would earn a total of  165.00  from holding Morgan Stanley Direct or generate 8.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Morgan Stanley Direct  vs.  EXES FUNDO DE

Morgan Stanley Direct

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Direct are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

EXES FUNDO DE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EXES FUNDO DE are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, EXES FUNDO 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 EXES FUNDO

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

The idea behind Morgan Stanley Direct and EXES FUNDO DE 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.