Correlation Between FG Annuities and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both FG Annuities 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 FG Annuities and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Annuities Life and Manulife Financial Corp, you can compare the effects of market volatilities on FG Annuities 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 FG Annuities with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and Manulife Financial.
Diversification Opportunities for FG Annuities and Manulife Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FG Annuities and Manulife is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life 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 FG Annuities 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 FG Annuities Life 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 FG Annuities i.e., FG Annuities and Manulife Financial go up and down completely randomly.
Pair Corralation between FG Annuities and Manulife Financial
Allowing for the 90-day total investment horizon FG Annuities Life is expected to generate 2.49 times more return on investment than Manulife Financial. However, FG Annuities is 2.49 times more volatile than Manulife Financial Corp. It trades about 0.19 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.17 per unit of risk. If you would invest 4,166 in FG Annuities Life on August 28, 2024 and sell it today you would earn a total of 677.00 from holding FG Annuities Life or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FG Annuities Life vs. Manulife Financial Corp
Performance |
| Timeline |
| FG Annuities Life |
| Manulife Financial Corp |
FG Annuities and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Annuities and Manulife Financial
The main advantage of trading using opposite FG Annuities and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities 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.| FG Annuities vs. Morningstar Unconstrained Allocation | FG Annuities vs. Via Renewables | FG Annuities vs. Sitka Gold Corp | FG Annuities vs. MSCI ACWI exAUCONSUMER |
| Manulife Financial vs. Prudential Financial | Manulife Financial vs. MetLife | Manulife Financial vs. Unum Group | Manulife Financial vs. Jackson Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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