Correlation Between Manulife Finl and Great West
Can any of the company-specific risk be diversified away by investing in both Manulife Finl and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Manulife Finl and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Finl and Great West.
Diversification Opportunities for Manulife Finl and Great West
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Great is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Finl Srs and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Manulife Finl i.e., Manulife Finl and Great West go up and down completely randomly.
Pair Corralation between Manulife Finl and Great West
Assuming the 90 days trading horizon Manulife Finl Srs is expected to under-perform the Great West. But the preferred stock apears to be less risky and, when comparing its historical volatility, Manulife Finl Srs is 1.05 times less risky than Great West. The preferred stock trades about -0.18 of its potential returns per unit of risk. The Great West Lifeco is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 2,240 in Great West Lifeco on August 25, 2024 and sell it today you would lose (82.00) from holding Great West Lifeco or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Finl Srs vs. Great West Lifeco
Performance |
| Timeline |
| Manulife Finl Srs |
| Great West Lifeco |
Manulife Finl and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Finl and Great West
The main advantage of trading using opposite Manulife Finl and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Finl position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Manulife Finl vs. Manulife Financial Corp | Manulife Finl vs. Manulife Financial Corp | Manulife Finl vs. Manulife Financial Corp | Manulife Finl vs. Manulife Financial Corp |
| Great West vs. Precision Drilling | Great West vs. Stampede Drilling | Great West vs. Sparx Technology | Great West vs. Ocumetics Technology 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |