Correlation Between CVW CleanTech and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Manulife Financial Corp, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Manulife Financial.
Diversification Opportunities for CVW CleanTech and Manulife Financial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVW and Manulife is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and Manulife Financial go up and down completely randomly.
Pair Corralation between CVW CleanTech and Manulife Financial
Assuming the 90 days horizon CVW CleanTech is expected to under-perform the Manulife Financial. In addition to that, CVW CleanTech is 2.04 times more volatile than Manulife Financial Corp. It trades about -0.05 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.26 per unit of volatility. If you would invest 1,725 in Manulife Financial Corp on November 4, 2024 and sell it today you would earn a total of 125.00 from holding Manulife Financial Corp or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Manulife Financial Corp
Performance |
| Timeline |
| CVW CleanTech |
| Manulife Financial Corp |
CVW CleanTech and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Manulife Financial
The main advantage of trading using opposite CVW CleanTech and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.The idea behind CVW CleanTech and Manulife Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Manulife Financial vs. Canadian Imperial Bank | Manulife Financial vs. South Pacific Metals | Manulife Financial vs. Sun Peak Metals | Manulife Financial vs. Olympia Financial Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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