Correlation Between Catalent and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Catalent 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 Catalent and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Manulife Financial, you can compare the effects of market volatilities on Catalent 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 Catalent with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Manulife Financial.
Diversification Opportunities for Catalent and Manulife Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalent and Manulife is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial and Catalent 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 Catalent 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 Catalent i.e., Catalent and Manulife Financial go up and down completely randomly.
Pair Corralation between Catalent and Manulife Financial
Given the investment horizon of 90 days Catalent is expected to generate 1.3 times more return on investment than Manulife Financial. However, Catalent is 1.3 times more volatile than Manulife Financial. It trades about 0.06 of its potential returns per unit of risk. Manulife Financial is currently generating about -0.05 per unit of risk. If you would invest 4,540 in Catalent on September 12, 2024 and sell it today you would earn a total of 1,684 from holding Catalent or generate 37.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalent vs. Manulife Financial
Performance |
| Timeline |
| Catalent |
| Manulife Financial |
Catalent and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Manulife Financial
The main advantage of trading using opposite Catalent and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent 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.| Catalent vs. Evoke Pharma | Catalent vs. Lantheus Holdings | Catalent vs. ANI Pharmaceuticals | Catalent vs. Ironwood Pharmaceuticals |
| Manulife Financial vs. Catalent | Manulife Financial vs. Electrovaya Common Shares | Manulife Financial vs. Jacobs Solutions | Manulife Financial vs. Sabre Corpo |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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