Correlation Between Manulife Financial and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Manulife Financial and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Auction Technology.
Diversification Opportunities for Manulife Financial and Auction Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Auction is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Manulife Financial i.e., Manulife Financial and Auction Technology go up and down completely randomly.
Pair Corralation between Manulife Financial and Auction Technology
Assuming the 90 days trading horizon Manulife Financial Corp is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, Manulife Financial Corp is 1.25 times less risky than Auction Technology. The stock trades about -0.24 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 54,900 in Auction Technology Group on November 6, 2024 and sell it today you would earn a total of 5,500 from holding Auction Technology Group or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 38.1% |
| Values | Daily Returns |
Manulife Financial Corp vs. Auction Technology Group
Performance |
| Timeline |
| Manulife Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Auction Technology |
Manulife Financial and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Auction Technology
The main advantage of trading using opposite Manulife Financial and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Manulife Financial vs. Samsung Electronics Co | Manulife Financial vs. Samsung Electronics Co | Manulife Financial vs. Toyota Motor Corp | Manulife Financial vs. Reliance Industries Ltd |
| Auction Technology vs. CNH Industrial NV | Auction Technology vs. Alliance Data Systems | Auction Technology vs. Universal Music Group | Auction Technology vs. Europa Metals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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