Correlation Between Leons Furniture and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Leons Furniture 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 Leons Furniture and Manulife Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and Manulife Finl Srs, you can compare the effects of market volatilities on Leons Furniture 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 Leons Furniture with a short position of Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and Manulife Finl.
Diversification Opportunities for Leons Furniture and Manulife Finl
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leons and Manulife is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited 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 Leons Furniture 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 Leons Furniture Limited 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 Leons Furniture i.e., Leons Furniture and Manulife Finl go up and down completely randomly.
Pair Corralation between Leons Furniture and Manulife Finl
Assuming the 90 days trading horizon Leons Furniture is expected to generate 1.57 times less return on investment than Manulife Finl. In addition to that, Leons Furniture is 3.0 times more volatile than Manulife Finl Srs. It trades about 0.09 of its total potential returns per unit of risk. Manulife Finl Srs is currently generating about 0.41 per unit of volatility. If you would invest 1,992 in Manulife Finl Srs on November 27, 2024 and sell it today you would earn a total of 128.00 from holding Manulife Finl Srs or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leons Furniture Limited vs. Manulife Finl Srs
Performance |
| Timeline |
| Leons Furniture |
| Manulife Finl Srs |
Leons Furniture and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and Manulife Finl
The main advantage of trading using opposite Leons Furniture and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture 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.| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont Industries |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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