Correlation Between Morgan Stanley and Midcap Fund
Can any of the company-specific risk be diversified away by investing in both Morgan Stanley and Midcap Fund 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 Midcap Fund 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 Midcap Fund Class, you can compare the effects of market volatilities on Morgan Stanley and Midcap Fund 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 Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Midcap Fund.
Diversification Opportunities for Morgan Stanley and Midcap Fund
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Morgan and Midcap is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Global and Midcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund Class 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 Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund Class has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Midcap Fund go up and down completely randomly.
Pair Corralation between Morgan Stanley and Midcap Fund
Assuming the 90 days horizon Morgan Stanley Global is expected to generate 0.96 times more return on investment than Midcap Fund. However, Morgan Stanley Global is 1.04 times less risky than Midcap Fund. It trades about 0.12 of its potential returns per unit of risk. Midcap Fund Class is currently generating about 0.05 per unit of risk. If you would invest 1,359 in Morgan Stanley Global on June 6, 2025 and sell it today you would earn a total of 76.00 from holding Morgan Stanley Global or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morgan Stanley Global vs. Midcap Fund Class
Performance |
| Timeline |
| Morgan Stanley Global |
| Midcap Fund Class |
Morgan Stanley and Midcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morgan Stanley and Midcap Fund
The main advantage of trading using opposite Morgan Stanley and Midcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morgan Stanley position performs unexpectedly, Midcap Fund 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 Midcap Fund will offset losses from the drop in Midcap Fund's long position.| Morgan Stanley vs. Emerging Markets Equity | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income | Morgan Stanley vs. Global Fixed Income |
| Midcap Fund vs. Trowe Price Retirement | Midcap Fund vs. American Funds Retirement | Midcap Fund vs. Voya Target Retirement | Midcap Fund vs. Strategic Allocation Moderate |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |