Correlation Between Morgan Stanley and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Fidelity Freedom 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 Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morgan Stanley Global and Fidelity Freedom Index, you can compare the effects of market volatilities on Morgan Stanley and Fidelity Freedom 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 Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Fidelity Freedom.
Diversification Opportunities for Morgan Stanley and Fidelity Freedom
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morgan and Fidelity is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index 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 Global are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Index has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Morgan Stanley and Fidelity Freedom
Assuming the 90 days horizon Morgan Stanley Global is expected to under-perform the Fidelity Freedom. In addition to that, Morgan Stanley is 5.95 times more volatile than Fidelity Freedom Index. It trades about -0.21 of its total potential returns per unit of risk. Fidelity Freedom Index is currently generating about -0.06 per unit of volatility. If you would invest 3,128 in Fidelity Freedom Index on October 6, 2025 and sell it today you would lose (27.00) from holding Fidelity Freedom Index or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Fidelity Freedom Index
Performance |
| Timeline |
| Morgan Stanley Global |
| Fidelity Freedom Index |
Morgan Stanley and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Fidelity Freedom
The main advantage of trading using opposite Morgan Stanley and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.| Morgan Stanley vs. Emerging Markets Equity | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global E Portfolio | Morgan Stanley vs. Global E Portfolio |
| Fidelity Freedom vs. Us Government Securities | Fidelity Freedom vs. Franklin Adjustable Government | Fidelity Freedom vs. Short Term Government Fund | Fidelity Freedom vs. Sit Government Securities |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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