Correlation Between Data Communications and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Data Communications and Manulife Finl 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 Data Communications and Manulife Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data Communications Management and Manulife Finl Srs, you can compare the effects of market volatilities on Data Communications and Manulife Finl 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 Data Communications with a short position of Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Communications and Manulife Finl.
Diversification Opportunities for Data Communications and Manulife Finl
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Data and Manulife is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Data Communications Management and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs and Data Communications 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 Data Communications Management are associated (or correlated) with Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Data Communications i.e., Data Communications and Manulife Finl go up and down completely randomly.
Pair Corralation between Data Communications and Manulife Finl
Assuming the 90 days trading horizon Data Communications Management is expected to under-perform the Manulife Finl. In addition to that, Data Communications is 10.75 times more volatile than Manulife Finl Srs. It trades about -0.19 of its total potential returns per unit of risk. Manulife Finl Srs is currently generating about -0.08 per unit of volatility. If you would invest 1,984 in Manulife Finl Srs on September 2, 2024 and sell it today you would lose (24.00) from holding Manulife Finl Srs or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data Communications Management vs. Manulife Finl Srs
Performance |
| Timeline |
| Data Communications |
| Manulife Finl Srs |
Data Communications and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data Communications and Manulife Finl
The main advantage of trading using opposite Data Communications and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Communications position performs unexpectedly, Manulife Finl 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 Finl will offset losses from the drop in Manulife Finl's long position.| Data Communications vs. Baylin Technologies | Data Communications vs. Kits Eyecare | Data Communications vs. Greenlane Renewables | Data Communications vs. Supremex |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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