Correlation Between Dow Jones and Manulife Fin
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Manulife Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Manulife Fin Non, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Manulife Fin.
Diversification Opportunities for Dow Jones and Manulife Fin
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Manulife is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Manulife Fin go up and down completely randomly.
Pair Corralation between Dow Jones and Manulife Fin
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.94 times more return on investment than Manulife Fin. However, Dow Jones is 1.94 times more volatile than Manulife Fin Non. It trades about 0.37 of its potential returns per unit of risk. Manulife Fin Non is currently generating about -0.04 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Manulife Fin Non
Performance |
| Timeline |
Dow Jones and Manulife Fin Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Manulife Fin Non
Pair trading matchups for Manulife Fin
Pair Trading with Dow Jones and Manulife Fin
The main advantage of trading using opposite Dow Jones and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Manulife Fin vs. Leons Furniture Limited | Manulife Fin vs. Advent Wireless | Manulife Fin vs. Perseus Mining | Manulife Fin vs. Plaza Retail REIT |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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