Correlation Between Great West and Manulife Fin
Can any of the company-specific risk be diversified away by investing in both Great West and Manulife Fin 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 Great West and Manulife Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifeco and Manulife Fin Non, you can compare the effects of market volatilities on Great West and Manulife Fin 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 Great West with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Manulife Fin.
Diversification Opportunities for Great West and Manulife Fin
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Manulife is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and Manulife Fin Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Fin Non and Great West 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 Great West Lifeco are associated (or correlated) with Manulife Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Fin Non has no effect on the direction of Great West i.e., Great West and Manulife Fin go up and down completely randomly.
Pair Corralation between Great West and Manulife Fin
Assuming the 90 days trading horizon Great West Lifeco is expected to generate 0.56 times more return on investment than Manulife Fin. However, Great West Lifeco is 1.8 times less risky than Manulife Fin. It trades about 0.12 of its potential returns per unit of risk. Manulife Fin Non is currently generating about 0.01 per unit of risk. If you would invest 1,999 in Great West Lifeco on September 1, 2024 and sell it today you would earn a total of 146.00 from holding Great West Lifeco or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifeco vs. Manulife Fin Non
Performance |
| Timeline |
| Great West Lifeco |
| Manulife Fin Non |
Great West and Manulife Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Manulife Fin
The main advantage of trading using opposite Great West and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Manulife Fin 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 Fin will offset losses from the drop in Manulife Fin's long position.| Great West vs. Fairfax Financial Holdings | Great West vs. iShares Canadian HYBrid | Great West vs. Brompton European Dividend | Great West vs. Solar Alliance Energy |
| Manulife Fin vs. Leons Furniture Limited | Manulife Fin vs. Advent Wireless | Manulife Fin vs. Perseus Mining | Manulife Fin vs. Plaza Retail REIT |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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