Correlation Between Dividend and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Dividend 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 Dividend and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dividend 15 Split and Manulife Financial Corp, you can compare the effects of market volatilities on Dividend 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 Dividend with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and Manulife Financial.
Diversification Opportunities for Dividend and Manulife Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dividend and Manulife is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split 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 Dividend 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 Dividend 15 Split 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 Dividend i.e., Dividend and Manulife Financial go up and down completely randomly.
Pair Corralation between Dividend and Manulife Financial
Assuming the 90 days horizon Dividend 15 Split is expected to generate 1.16 times more return on investment than Manulife Financial. However, Dividend is 1.16 times more volatile than Manulife Financial Corp. It trades about 0.23 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.18 per unit of risk. If you would invest 448.00 in Dividend 15 Split on September 1, 2024 and sell it today you would earn a total of 212.00 from holding Dividend 15 Split or generate 47.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dividend 15 Split vs. Manulife Financial Corp
Performance |
| Timeline |
| Dividend 15 Split |
| Manulife Financial Corp |
Dividend and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dividend and Manulife Financial
The main advantage of trading using opposite Dividend and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dividend 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.| Dividend vs. North American Financial | Dividend vs. Dividend Growth Split | Dividend vs. Dividend 15 Split | Dividend vs. Financial 15 Split |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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