Correlation Between GDI Integrated and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both GDI Integrated 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 GDI Integrated and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDI Integrated and Manulife Financial Corp, you can compare the effects of market volatilities on GDI Integrated 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 GDI Integrated with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDI Integrated and Manulife Financial.
Diversification Opportunities for GDI Integrated and Manulife Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GDI and Manulife is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated 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 GDI Integrated 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 GDI Integrated 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 GDI Integrated i.e., GDI Integrated and Manulife Financial go up and down completely randomly.
Pair Corralation between GDI Integrated and Manulife Financial
Assuming the 90 days trading horizon GDI Integrated is expected to generate 3.79 times more return on investment than Manulife Financial. However, GDI Integrated is 3.79 times more volatile than Manulife Financial Corp. It trades about 0.02 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about -0.08 per unit of risk. If you would invest 3,610 in GDI Integrated on September 12, 2024 and sell it today you would earn a total of 35.00 from holding GDI Integrated or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDI Integrated vs. Manulife Financial Corp
Performance |
| Timeline |
| GDI Integrated |
| Manulife Financial Corp |
GDI Integrated and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDI Integrated and Manulife Financial
The main advantage of trading using opposite GDI Integrated and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDI Integrated 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.The idea behind GDI Integrated and Manulife Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Fin Non | Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Financial Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |