Correlation Between LFM Properties and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both LFM Properties 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 LFM Properties and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LFM Properties Corp and Manulife Financial Corp, you can compare the effects of market volatilities on LFM Properties 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 LFM Properties with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Manulife Financial.
Diversification Opportunities for LFM Properties and Manulife Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LFM and Manulife is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp 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 LFM Properties 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 LFM Properties Corp 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 LFM Properties i.e., LFM Properties and Manulife Financial go up and down completely randomly.
Pair Corralation between LFM Properties and Manulife Financial
Assuming the 90 days trading horizon LFM Properties is expected to generate 1.22 times less return on investment than Manulife Financial. In addition to that, LFM Properties is 1.85 times more volatile than Manulife Financial Corp. It trades about 0.05 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.11 per unit of volatility. If you would invest 95,388 in Manulife Financial Corp on August 29, 2024 and sell it today you would earn a total of 104,612 from holding Manulife Financial Corp or generate 109.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.12% |
| Values | Daily Returns |
LFM Properties Corp vs. Manulife Financial Corp
Performance |
| Timeline |
| LFM Properties Corp |
| Manulife Financial Corp |
LFM Properties and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Manulife Financial
The main advantage of trading using opposite LFM Properties and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties 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.| LFM Properties vs. Philippine Savings Bank | LFM Properties vs. Metro Retail Stores | LFM Properties vs. Atlas Consolidated Mining | LFM Properties vs. Transpacific Broadband Group |
| Manulife Financial vs. Sun Life Financial | Manulife Financial vs. National Reinsurance | Manulife Financial vs. Allhome Corp | Manulife Financial vs. Jollibee Foods Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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