Correlation Between Great West and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Manulife Financial 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 Financial Corp, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Manulife Financial.
Diversification Opportunities for Great West and Manulife Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Great and Manulife is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco 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 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 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 Great West i.e., Great West and Manulife Financial go up and down completely randomly.
Pair Corralation between Great West and Manulife Financial
Assuming the 90 days trading horizon Great West Lifeco is expected to under-perform the Manulife Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Great West Lifeco is 1.1 times less risky than Manulife Financial. The preferred stock trades about -0.25 of its potential returns per unit of risk. The Manulife Financial Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,312 in Manulife Financial Corp on August 25, 2024 and sell it today you would lose (26.00) from holding Manulife Financial Corp or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifeco vs. Manulife Financial Corp
Performance |
| Timeline |
| Great West Lifeco |
| Manulife Financial Corp |
Great West and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Manulife Financial
The main advantage of trading using opposite Great West and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Arizona Gold Silver | Great West vs. Advent Wireless | Great West vs. Endeavour Silver Corp | Great West vs. 2028 Investment Grade |
| Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Finl Srs |
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.
Other Complementary Tools
| 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 | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |