Correlation Between Manulife Financial and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Manulife Financial and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Dalata Hotel.
Diversification Opportunities for Manulife Financial and Dalata Hotel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Dalata is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Manulife Financial i.e., Manulife Financial and Dalata Hotel go up and down completely randomly.
Pair Corralation between Manulife Financial and Dalata Hotel
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.77 times more return on investment than Dalata Hotel. However, Manulife Financial Corp is 1.3 times less risky than Dalata Hotel. It trades about 0.22 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.01 per unit of risk. If you would invest 2,850 in Manulife Financial Corp on October 27, 2024 and sell it today you would earn a total of 1,535 from holding Manulife Financial Corp or generate 53.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 44.8% |
| Values | Daily Returns |
Manulife Financial Corp vs. Dalata Hotel Group
Performance |
| Timeline |
| Manulife Financial Corp |
| Dalata Hotel Group |
Manulife Financial and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Dalata Hotel
The main advantage of trading using opposite Manulife Financial and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Manulife Financial vs. Auction Technology Group | Manulife Financial vs. Dairy Farm International | Manulife Financial vs. Heavitree Brewery | Manulife Financial vs. Young Cos Brewery |
| Dalata Hotel vs. Naked Wines plc | Dalata Hotel vs. United States Steel | Dalata Hotel vs. Dentsply Sirona | Dalata Hotel vs. Symphony Environmental Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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