Correlation Between European Metals and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Manulife Financial Corp, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Manulife Financial.
Diversification Opportunities for European Metals and Manulife Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and Manulife is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and Manulife Financial go up and down completely randomly.
Pair Corralation between European Metals and Manulife Financial
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Manulife Financial. In addition to that, European Metals is 1.92 times more volatile than Manulife Financial Corp. It trades about -0.06 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.18 per unit of volatility. If you would invest 2,323 in Manulife Financial Corp on October 12, 2024 and sell it today you would earn a total of 1,970 from holding Manulife Financial Corp or generate 84.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 36.35% |
| Values | Daily Returns |
European Metals Holdings vs. Manulife Financial Corp
Performance |
| Timeline |
| European Metals Holdings |
| Manulife Financial Corp |
European Metals and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Manulife Financial
The main advantage of trading using opposite European Metals and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. American Homes 4 | European Metals vs. Clean Power Hydrogen | European Metals vs. PPHE Hotel Group | European Metals vs. Wyndham Hotels Resorts |
| Manulife Financial vs. Walmart | Manulife Financial vs. BYD Co | Manulife Financial vs. Volkswagen AG | Manulife Financial vs. Volkswagen AG Non Vtg |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |