Correlation Between JLEN Environmental and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both JLEN Environmental 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 JLEN Environmental and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLEN Environmental Assets and Manulife Financial Corp, you can compare the effects of market volatilities on JLEN Environmental 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 JLEN Environmental with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLEN Environmental and Manulife Financial.
Diversification Opportunities for JLEN Environmental and Manulife Financial
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JLEN and Manulife is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding JLEN Environmental Assets 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 JLEN Environmental 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 JLEN Environmental Assets 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 JLEN Environmental i.e., JLEN Environmental and Manulife Financial go up and down completely randomly.
Pair Corralation between JLEN Environmental and Manulife Financial
Assuming the 90 days trading horizon JLEN Environmental Assets is expected to under-perform the Manulife Financial. In addition to that, JLEN Environmental is 1.38 times more volatile than Manulife Financial Corp. It trades about -0.23 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.04 per unit of volatility. If you would invest 4,362 in Manulife Financial Corp on October 29, 2024 and sell it today you would earn a total of 23.00 from holding Manulife Financial Corp or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 57.89% |
| Values | Daily Returns |
JLEN Environmental Assets vs. Manulife Financial Corp
Performance |
| Timeline |
| JLEN Environmental Assets |
| Manulife Financial Corp |
JLEN Environmental and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLEN Environmental and Manulife Financial
The main advantage of trading using opposite JLEN Environmental and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLEN Environmental 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.| JLEN Environmental vs. New Residential Investment | JLEN Environmental vs. Ecclesiastical Insurance Office | JLEN Environmental vs. Norman Broadbent Plc | JLEN Environmental vs. Vietnam Enterprise Investments |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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