Correlation Between Manulife Financial and Light Science
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Light Science 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 Light Science 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 Light Science Technologies, you can compare the effects of market volatilities on Manulife Financial and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Light Science.
Diversification Opportunities for Manulife Financial and Light Science
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Manulife and Light is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Manulife Financial i.e., Manulife Financial and Light Science go up and down completely randomly.
Pair Corralation between Manulife Financial and Light Science
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.51 times more return on investment than Light Science. However, Manulife Financial Corp is 1.97 times less risky than Light Science. It trades about 0.07 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.26 per unit of risk. If you would invest 4,362 in Manulife Financial Corp on October 23, 2024 and sell it today you would earn a total of 34.00 from holding Manulife Financial Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Light Science Technologies
Performance |
| Timeline |
| Manulife Financial Corp |
| Light Science Techno |
Manulife Financial and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Light Science
The main advantage of trading using opposite Manulife Financial and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Manulife Financial vs. Home Depot | Manulife Financial vs. Weiss Korea Opportunity | Manulife Financial vs. River and Mercantile | Manulife Financial vs. Chrysalis Investments |
| Light Science vs. Costco Wholesale Corp | Light Science vs. Moneta Money Bank | Light Science vs. Manulife Financial Corp | Light Science vs. Bankers Investment Trust |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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