Correlation Between Economic Investment and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Economic Investment 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 Economic Investment and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Manulife Financial Corp, you can compare the effects of market volatilities on Economic Investment 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 Economic Investment with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Manulife Financial.
Diversification Opportunities for Economic Investment and Manulife Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Economic and Manulife is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust 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 Economic Investment 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 Economic Investment Trust 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 Economic Investment i.e., Economic Investment and Manulife Financial go up and down completely randomly.
Pair Corralation between Economic Investment and Manulife Financial
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.67 times more return on investment than Manulife Financial. However, Economic Investment Trust is 1.5 times less risky than Manulife Financial. It trades about 0.09 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.05 per unit of risk. If you would invest 11,522 in Economic Investment Trust on October 11, 2024 and sell it today you would earn a total of 5,378 from holding Economic Investment Trust or generate 46.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Manulife Financial Corp
Performance |
| Timeline |
| Economic Investment Trust |
| Manulife Financial Corp |
Economic Investment and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Manulife Financial
The main advantage of trading using opposite Economic Investment and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment 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.| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
| Manulife Financial vs. Calian Technologies | Manulife Financial vs. Evertz Technologies Limited | Manulife Financial vs. Ocumetics Technology Corp | Manulife Financial vs. Westshore Terminals Investment |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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