Correlation Between Manulife Financial and Raymond James
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Raymond James 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 Manulife Financial and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial Corp and Raymond James Financial, you can compare the effects of market volatilities on Manulife Financial and Raymond James 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 Manulife Financial with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Raymond James.
Diversification Opportunities for Manulife Financial and Raymond James
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Manulife and Raymond is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial and Manulife Financial 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 Manulife Financial Corp are associated (or correlated) with Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of Manulife Financial i.e., Manulife Financial and Raymond James go up and down completely randomly.
Pair Corralation between Manulife Financial and Raymond James
Assuming the 90 days trading horizon Manulife Financial Corp is expected to under-perform the Raymond James. But the stock apears to be less risky and, when comparing its historical volatility, Manulife Financial Corp is 1.35 times less risky than Raymond James. The stock trades about 0.0 of its potential returns per unit of risk. The Raymond James Financial is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 15,469 in Raymond James Financial on November 2, 2024 and sell it today you would earn a total of 1,632 from holding Raymond James Financial or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.63% |
| Values | Daily Returns |
Manulife Financial Corp vs. Raymond James Financial
Performance |
| Timeline |
| Manulife Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Raymond James Financial |
Manulife Financial and Raymond James Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Raymond James
The main advantage of trading using opposite Manulife Financial and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Raymond James 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 Raymond James will offset losses from the drop in Raymond James' long position.| Manulife Financial vs. Spirent Communications plc | Manulife Financial vs. United Internet AG | Manulife Financial vs. Dalata Hotel Group | Manulife Financial vs. Invesco Physical Silver |
| Raymond James vs. Grieg Seafood | Raymond James vs. Universal Display Corp | Raymond James vs. Associated British Foods | Raymond James vs. Leroy Seafood Group |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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