Correlation Between Manulife Financial and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Vodafone Group 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 Vodafone Group 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 Vodafone Group PLC, you can compare the effects of market volatilities on Manulife Financial and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Vodafone Group.
Diversification Opportunities for Manulife Financial and Vodafone Group
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and Vodafone is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Manulife Financial i.e., Manulife Financial and Vodafone Group go up and down completely randomly.
Pair Corralation between Manulife Financial and Vodafone Group
Assuming the 90 days trading horizon Manulife Financial Corp is expected to under-perform the Vodafone Group. In addition to that, Manulife Financial is 1.39 times more volatile than Vodafone Group PLC. It trades about -0.07 of its total potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.01 per unit of volatility. If you would invest 6,862 in Vodafone Group PLC on November 4, 2024 and sell it today you would earn a total of 6.00 from holding Vodafone Group PLC or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.91% |
| Values | Daily Returns |
Manulife Financial Corp vs. Vodafone Group PLC
Performance |
| Timeline |
| Manulife Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Vodafone Group PLC |
Manulife Financial and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Vodafone Group
The main advantage of trading using opposite Manulife Financial and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Manulife Financial vs. Allianz Technology Trust | Manulife Financial vs. Sunny Optical Technology | Manulife Financial vs. Pfeiffer Vacuum Technology | Manulife Financial vs. Cognizant Technology Solutions |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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