Correlation Between Superior Plus and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Manulife 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 Superior Plus and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Manulife Financial, you can compare the effects of market volatilities on Superior Plus and Manulife 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 Superior Plus with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Manulife Financial.
Diversification Opportunities for Superior Plus and Manulife Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Manulife is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial has no effect on the direction of Superior Plus i.e., Superior Plus and Manulife Financial go up and down completely randomly.
Pair Corralation between Superior Plus and Manulife Financial
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Manulife Financial. In addition to that, Superior Plus is 1.34 times more volatile than Manulife Financial. It trades about -0.02 of its total potential returns per unit of risk. Manulife Financial is currently generating about 0.12 per unit of volatility. If you would invest 1,541 in Manulife Financial on September 12, 2024 and sell it today you would earn a total of 1,469 from holding Manulife Financial or generate 95.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Manulife Financial
Performance |
| Timeline |
| Superior Plus Corp |
| Manulife Financial |
Superior Plus and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Manulife Financial
The main advantage of trading using opposite Superior Plus and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Manulife 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
| Manulife Financial vs. Superior Plus Corp | Manulife Financial vs. SIVERS SEMICONDUCTORS AB | Manulife Financial vs. CHINA HUARONG ENERHD 50 | Manulife Financial vs. NORDIC HALIBUT AS |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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