Correlation Between Bird Construction and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Bird Construction 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 Bird Construction and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bird Construction and Manulife Financial Corp, you can compare the effects of market volatilities on Bird Construction 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 Bird Construction with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bird Construction and Manulife Financial.
Diversification Opportunities for Bird Construction and Manulife Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bird and Manulife is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bird Construction 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 Bird Construction 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 Bird Construction 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 Bird Construction i.e., Bird Construction and Manulife Financial go up and down completely randomly.
Pair Corralation between Bird Construction and Manulife Financial
Assuming the 90 days trading horizon Bird Construction is expected to generate 1.62 times more return on investment than Manulife Financial. However, Bird Construction is 1.62 times more volatile than Manulife Financial Corp. It trades about 0.11 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.05 per unit of risk. If you would invest 810.00 in Bird Construction on October 11, 2024 and sell it today you would earn a total of 1,641 from holding Bird Construction or generate 202.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bird Construction vs. Manulife Financial Corp
Performance |
| Timeline |
| Bird Construction |
| Manulife Financial Corp |
Bird Construction and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bird Construction and Manulife Financial
The main advantage of trading using opposite Bird Construction and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bird Construction 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.| Bird Construction vs. Aecon Group | Bird Construction vs. Mullen Group | Bird Construction vs. Wajax | Bird Construction vs. Exchange Income |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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