Correlation Between Fidelity Advantage and Manulife Multifactor
Can any of the company-specific risk be diversified away by investing in both Fidelity Advantage and Manulife Multifactor 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 Fidelity Advantage and Manulife Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advantage Bitcoin and Manulife Multifactor Canadian, you can compare the effects of market volatilities on Fidelity Advantage and Manulife Multifactor 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 Fidelity Advantage with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advantage and Manulife Multifactor.
Diversification Opportunities for Fidelity Advantage and Manulife Multifactor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Manulife is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advantage Bitcoin and Manulife Multifactor Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor and Fidelity Advantage 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 Fidelity Advantage Bitcoin are associated (or correlated) with Manulife Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Multifactor has no effect on the direction of Fidelity Advantage i.e., Fidelity Advantage and Manulife Multifactor go up and down completely randomly.
Pair Corralation between Fidelity Advantage and Manulife Multifactor
Assuming the 90 days trading horizon Fidelity Advantage Bitcoin is expected to generate 3.65 times more return on investment than Manulife Multifactor. However, Fidelity Advantage is 3.65 times more volatile than Manulife Multifactor Canadian. It trades about 0.13 of its potential returns per unit of risk. Manulife Multifactor Canadian is currently generating about 0.06 per unit of risk. If you would invest 1,312 in Fidelity Advantage Bitcoin on September 12, 2024 and sell it today you would earn a total of 3,216 from holding Fidelity Advantage Bitcoin or generate 245.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advantage Bitcoin vs. Manulife Multifactor Canadian
Performance |
| Timeline |
| Fidelity Advantage |
| Manulife Multifactor |
Fidelity Advantage and Manulife Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advantage and Manulife Multifactor
The main advantage of trading using opposite Fidelity Advantage and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advantage position performs unexpectedly, Manulife Multifactor 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 Multifactor will offset losses from the drop in Manulife Multifactor's long position.| Fidelity Advantage vs. 3iQ Bitcoin ETF | Fidelity Advantage vs. Purpose Bitcoin CAD | Fidelity Advantage vs. BMO Aggregate Bond | Fidelity Advantage vs. iShares Canadian HYBrid |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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