Correlation Between Manulife Finl and Melcor Developments
Can any of the company-specific risk be diversified away by investing in both Manulife Finl and Melcor Developments 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 Melcor Developments 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 Melcor Developments, you can compare the effects of market volatilities on Manulife Finl and Melcor Developments 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 Melcor Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Finl and Melcor Developments.
Diversification Opportunities for Manulife Finl and Melcor Developments
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and Melcor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Finl Srs and Melcor Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melcor Developments 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 Melcor Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melcor Developments has no effect on the direction of Manulife Finl i.e., Manulife Finl and Melcor Developments go up and down completely randomly.
Pair Corralation between Manulife Finl and Melcor Developments
Assuming the 90 days trading horizon Manulife Finl is expected to generate 1.8 times less return on investment than Melcor Developments. But when comparing it to its historical volatility, Manulife Finl Srs is 1.32 times less risky than Melcor Developments. It trades about 0.04 of its potential returns per unit of risk. Melcor Developments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 964.00 in Melcor Developments on August 27, 2024 and sell it today you would earn a total of 333.00 from holding Melcor Developments or generate 34.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Finl Srs vs. Melcor Developments
Performance |
| Timeline |
| Manulife Finl Srs |
| Melcor Developments |
Manulife Finl and Melcor Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Finl and Melcor Developments
The main advantage of trading using opposite Manulife Finl and Melcor Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Finl position performs unexpectedly, Melcor Developments 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 Melcor Developments will offset losses from the drop in Melcor Developments' long position.| Manulife Finl vs. Canadian Imperial Bank | Manulife Finl vs. Pembina Pipeline Corp | Manulife Finl vs. HPQ Silicon Resources | Manulife Finl vs. Bank of Nova |
| Melcor Developments vs. Melcor Real Estate | Melcor Developments vs. Mainstreet Equity Corp | Melcor Developments vs. Genesis Land Development | Melcor Developments vs. Morguard |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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