Correlation Between Brookfield and Manulife Fin
Can any of the company-specific risk be diversified away by investing in both Brookfield and Manulife Fin 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 Brookfield and Manulife Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield and Manulife Fin Non, you can compare the effects of market volatilities on Brookfield and Manulife Fin 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 Brookfield with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield and Manulife Fin.
Diversification Opportunities for Brookfield and Manulife Fin
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Manulife is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and Manulife Fin Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Fin Non and Brookfield 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 Brookfield are associated (or correlated) with Manulife Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Fin Non has no effect on the direction of Brookfield i.e., Brookfield and Manulife Fin go up and down completely randomly.
Pair Corralation between Brookfield and Manulife Fin
Assuming the 90 days horizon Brookfield is expected to generate 2.56 times more return on investment than Manulife Fin. However, Brookfield is 2.56 times more volatile than Manulife Fin Non. It trades about 0.07 of its potential returns per unit of risk. Manulife Fin Non is currently generating about 0.06 per unit of risk. If you would invest 4,217 in Brookfield on January 26, 2025 and sell it today you would earn a total of 3,165 from holding Brookfield or generate 75.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Brookfield vs. Manulife Fin Non
Performance |
| Timeline |
| Brookfield |
| Manulife Fin Non |
Brookfield and Manulife Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield and Manulife Fin
The main advantage of trading using opposite Brookfield and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield position performs unexpectedly, Manulife Fin 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 Fin will offset losses from the drop in Manulife Fin's long position.| Brookfield vs. Brookfield Asset Management | Brookfield vs. Alimentation Couchen Tard | Brookfield vs. Brookfield Infrastructure Partners | Brookfield vs. Brookfield Infrastructure Corp |
| Manulife Fin vs. Precision Drilling | Manulife Fin vs. Pembina Pipeline Corp | Manulife Fin vs. Algonquin Power Utilities | Manulife Fin vs. Gamehost |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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