Correlation Between Amazon CDR and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Manulife Finl 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 Amazon CDR and Manulife Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Manulife Finl Srs, you can compare the effects of market volatilities on Amazon CDR and Manulife Finl 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 Amazon CDR with a short position of Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Manulife Finl.
Diversification Opportunities for Amazon CDR and Manulife Finl
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Manulife is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs and Amazon CDR 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 Amazon CDR are associated (or correlated) with Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Amazon CDR i.e., Amazon CDR and Manulife Finl go up and down completely randomly.
Pair Corralation between Amazon CDR and Manulife Finl
Assuming the 90 days trading horizon Amazon CDR is expected to generate 2.28 times more return on investment than Manulife Finl. However, Amazon CDR is 2.28 times more volatile than Manulife Finl Srs. It trades about 0.09 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about 0.04 per unit of risk. If you would invest 1,110 in Amazon CDR on August 29, 2024 and sell it today you would earn a total of 1,341 from holding Amazon CDR or generate 120.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Manulife Finl Srs
Performance |
| Timeline |
| Amazon CDR |
| Manulife Finl Srs |
Amazon CDR and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Manulife Finl
The main advantage of trading using opposite Amazon CDR and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Manulife Finl 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 Finl will offset losses from the drop in Manulife Finl's long position.| Amazon CDR vs. Eros Resources Corp | Amazon CDR vs. Apple Inc CDR | Amazon CDR vs. European Residential Real | Amazon CDR vs. Canadian Utilities Ltd |
| Manulife Finl vs. US Financial 15 | Manulife Finl vs. Leons Furniture Limited | Manulife Finl vs. iA Financial | Manulife Finl vs. Canso Credit 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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