Correlation Between FT Cboe and Morgan Stanley

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

By analyzing existing cross correlation between FT Cboe Vest and Morgan Stanley ETF, you can compare the effects of market volatilities on FT Cboe and Morgan Stanley 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 FT Cboe with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and Morgan Stanley.

Diversification Opportunities for FT Cboe and Morgan Stanley

0.8

Correlation Coefficient

FT Cboe  Morgan Stanley

Very poor diversification

The 3 months correlation between BUFZ and Morgan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and Morgan Stanley ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley ETF and FT Cboe 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 FT Cboe Vest are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley ETF has no effect on the direction of FT Cboe i.e., FT Cboe and Morgan Stanley go up and down completely randomly.

Pair Corralation between FT Cboe and Morgan Stanley

Given the investment horizon of 90 days FT Cboe is expected to generate 1.8 times less return on investment than Morgan Stanley. But when comparing it to its historical volatility, FT Cboe Vest is 2.17 times less risky than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,865  in Morgan Stanley ETF on September 13, 2025 and sell it today you would earn a total of  2,570  from holding Morgan Stanley ETF or generate 43.82% return on investment over 90 days.

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

FT Cboe Vest  vs.  Morgan Stanley ETF

FT Cboe Vest

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, FT Cboe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Morgan Stanley ETF

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Morgan Stanley is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FT Cboe and Morgan Stanley

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

The idea behind FT Cboe Vest and Morgan Stanley ETF 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.