Correlation Between HPQ Silicon and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both HPQ Silicon and Manulife Finl 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 HPQ Silicon and Manulife Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HPQ Silicon Resources and Manulife Finl Srs, you can compare the effects of market volatilities on HPQ Silicon and Manulife Finl 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 HPQ Silicon with a short position of Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPQ Silicon and Manulife Finl.
Diversification Opportunities for HPQ Silicon and Manulife Finl
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HPQ and Manulife is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding HPQ Silicon Resources and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs and HPQ Silicon 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 HPQ Silicon Resources are associated (or correlated) with Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of HPQ Silicon i.e., HPQ Silicon and Manulife Finl go up and down completely randomly.
Pair Corralation between HPQ Silicon and Manulife Finl
Assuming the 90 days horizon HPQ Silicon Resources is expected to generate 4.93 times more return on investment than Manulife Finl. However, HPQ Silicon is 4.93 times more volatile than Manulife Finl Srs. It trades about 0.02 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about 0.05 per unit of risk. If you would invest 25.00 in HPQ Silicon Resources on August 27, 2024 and sell it today you would earn a total of 1.00 from holding HPQ Silicon Resources or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HPQ Silicon Resources vs. Manulife Finl Srs
Performance |
| Timeline |
| HPQ Silicon Resources |
| Manulife Finl Srs |
HPQ Silicon and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HPQ Silicon and Manulife Finl
The main advantage of trading using opposite HPQ Silicon and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HPQ Silicon position performs unexpectedly, Manulife Finl 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 Finl will offset losses from the drop in Manulife Finl's long position.| HPQ Silicon vs. First Majestic Silver | HPQ Silicon vs. Ivanhoe Energy | HPQ Silicon vs. Orezone Gold Corp | HPQ Silicon vs. Faraday Copper Corp |
| Manulife Finl vs. Canadian Imperial Bank | Manulife Finl vs. Pembina Pipeline Corp | Manulife Finl vs. HPQ Silicon Resources | Manulife Finl vs. Bank of Nova |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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