Correlation Between Manulife Finl and Falcon Energy
Can any of the company-specific risk be diversified away by investing in both Manulife Finl and Falcon Energy 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 Manulife Finl and Falcon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Finl Srs and Falcon Energy Materials, you can compare the effects of market volatilities on Manulife Finl and Falcon Energy 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 Manulife Finl with a short position of Falcon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Finl and Falcon Energy.
Diversification Opportunities for Manulife Finl and Falcon Energy
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Manulife and Falcon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Finl Srs and Falcon Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Energy Materials and Manulife Finl 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 Manulife Finl Srs are associated (or correlated) with Falcon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Energy Materials has no effect on the direction of Manulife Finl i.e., Manulife Finl and Falcon Energy go up and down completely randomly.
Pair Corralation between Manulife Finl and Falcon Energy
Assuming the 90 days trading horizon Manulife Finl Srs is expected to under-perform the Falcon Energy. But the preferred stock apears to be less risky and, when comparing its historical volatility, Manulife Finl Srs is 6.87 times less risky than Falcon Energy. The preferred stock trades about -0.14 of its potential returns per unit of risk. The Falcon Energy Materials is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Falcon Energy Materials on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Falcon Energy Materials or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Finl Srs vs. Falcon Energy Materials
Performance |
| Timeline |
| Manulife Finl Srs |
| Falcon Energy Materials |
Manulife Finl and Falcon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Finl and Falcon Energy
The main advantage of trading using opposite Manulife Finl and Falcon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Finl position performs unexpectedly, Falcon Energy 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 Falcon Energy will offset losses from the drop in Falcon Energy's long position.| Manulife Finl vs. Falcon Energy Materials | Manulife Finl vs. Renoworks Software | Manulife Finl vs. Data Communications Management | Manulife Finl vs. Enerev5 Metals |
| Falcon Energy vs. Data Communications Management | Falcon Energy vs. Lion One Metals | Falcon Energy vs. DIRTT Environmental Solutions | Falcon Energy vs. Arbor Metals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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