Correlation Between Manulife Financial and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Tetragon Financial 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 Tetragon Financial 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 Tetragon Financial Group, you can compare the effects of market volatilities on Manulife Financial and Tetragon Financial 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 Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Tetragon Financial.
Diversification Opportunities for Manulife Financial and Tetragon Financial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Tetragon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon 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 Tetragon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetragon Financial has no effect on the direction of Manulife Financial i.e., Manulife Financial and Tetragon Financial go up and down completely randomly.
Pair Corralation between Manulife Financial and Tetragon Financial
Assuming the 90 days trading horizon Manulife Financial Corp is expected to under-perform the Tetragon Financial. But the stock apears to be less risky and, when comparing its historical volatility, Manulife Financial Corp is 1.5 times less risky than Tetragon Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Tetragon Financial Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Tetragon Financial Group on November 2, 2024 and sell it today you would earn a total of 145.00 from holding Tetragon Financial Group or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.62% |
| Values | Daily Returns |
Manulife Financial Corp vs. Tetragon Financial Group
Performance |
| Timeline |
| Manulife Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Tetragon Financial |
Manulife Financial and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Tetragon Financial
The main advantage of trading using opposite Manulife Financial and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Tetragon Financial 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 Tetragon Financial will offset losses from the drop in Tetragon Financial's 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 |
| Tetragon Financial vs. SupplyMe Capital PLC | Tetragon Financial vs. Premier African Minerals | Tetragon Financial vs. SANTANDER UK 8 | Tetragon Financial vs. Tower Resources plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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