Correlation Between American National and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both American National 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 American National and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Group and Manulife Financial Corp, you can compare the effects of market volatilities on American National 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 American National with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and Manulife Financial.
Diversification Opportunities for American National and Manulife Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Manulife is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding American National Group and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and American National 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 American National Group 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 Corp has no effect on the direction of American National i.e., American National and Manulife Financial go up and down completely randomly.
Pair Corralation between American National and Manulife Financial
Assuming the 90 days trading horizon American National is expected to generate 4.12 times less return on investment than Manulife Financial. But when comparing it to its historical volatility, American National Group is 1.23 times less risky than Manulife Financial. It trades about 0.03 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,608 in Manulife Financial Corp on August 28, 2024 and sell it today you would earn a total of 1,588 from holding Manulife Financial Corp or generate 98.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American National Group vs. Manulife Financial Corp
Performance |
| Timeline |
| American National |
| Manulife Financial Corp |
American National and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and Manulife Financial
The main advantage of trading using opposite American National and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National 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.| American National vs. Omni Health | American National vs. FiscalNote Holdings | American National vs. Waste Management | American National vs. Teleflex Incorporated |
| Manulife Financial vs. Prudential Financial | Manulife Financial vs. MetLife | Manulife Financial vs. Unum Group | Manulife Financial vs. Jackson Financial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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