Correlation Between Manulife Financial and Silver Bullet
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Silver Bullet 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 Silver Bullet 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 Silver Bullet Data, you can compare the effects of market volatilities on Manulife Financial and Silver Bullet 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 Silver Bullet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Silver Bullet.
Diversification Opportunities for Manulife Financial and Silver Bullet
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Manulife and Silver is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Silver Bullet Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bullet Data 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 Silver Bullet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bullet Data has no effect on the direction of Manulife Financial i.e., Manulife Financial and Silver Bullet go up and down completely randomly.
Pair Corralation between Manulife Financial and Silver Bullet
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.71 times more return on investment than Silver Bullet. However, Manulife Financial Corp is 1.41 times less risky than Silver Bullet. It trades about 0.15 of its potential returns per unit of risk. Silver Bullet Data is currently generating about 0.08 per unit of risk. If you would invest 4,089 in Manulife Financial Corp on October 24, 2024 and sell it today you would earn a total of 307.00 from holding Manulife Financial Corp or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 42.62% |
| Values | Daily Returns |
Manulife Financial Corp vs. Silver Bullet Data
Performance |
| Timeline |
| Manulife Financial Corp |
| Silver Bullet Data |
Manulife Financial and Silver Bullet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Silver Bullet
The main advantage of trading using opposite Manulife Financial and Silver Bullet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Silver Bullet 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 Silver Bullet will offset losses from the drop in Silver Bullet's long position.| Manulife Financial vs. Electronic Arts | Manulife Financial vs. SMA Solar Technology | Manulife Financial vs. European Metals Holdings | Manulife Financial vs. Sovereign Metals |
| Silver Bullet vs. Air Products Chemicals | Silver Bullet vs. Pfeiffer Vacuum Technology | Silver Bullet vs. Xeros Technology Group | Silver Bullet vs. Young Cos Brewery |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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