Correlation Between Manulife Finl and SmartCentres Real
Can any of the company-specific risk be diversified away by investing in both Manulife Finl and SmartCentres Real 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 SmartCentres Real 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 SmartCentres Real Estate, you can compare the effects of market volatilities on Manulife Finl and SmartCentres Real 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 SmartCentres Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Finl and SmartCentres Real.
Diversification Opportunities for Manulife Finl and SmartCentres Real
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and SmartCentres is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Finl Srs and SmartCentres Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartCentres Real Estate 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 SmartCentres Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartCentres Real Estate has no effect on the direction of Manulife Finl i.e., Manulife Finl and SmartCentres Real go up and down completely randomly.
Pair Corralation between Manulife Finl and SmartCentres Real
Assuming the 90 days trading horizon Manulife Finl Srs is expected to under-perform the SmartCentres Real. But the preferred stock apears to be less risky and, when comparing its historical volatility, Manulife Finl Srs is 1.11 times less risky than SmartCentres Real. The preferred stock trades about -0.03 of its potential returns per unit of risk. The SmartCentres Real Estate is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,491 in SmartCentres Real Estate on September 1, 2024 and sell it today you would earn a total of 80.00 from holding SmartCentres Real Estate or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Finl Srs vs. SmartCentres Real Estate
Performance |
| Timeline |
| Manulife Finl Srs |
| SmartCentres Real Estate |
Manulife Finl and SmartCentres Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Finl and SmartCentres Real
The main advantage of trading using opposite Manulife Finl and SmartCentres Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Finl position performs unexpectedly, SmartCentres Real 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 SmartCentres Real will offset losses from the drop in SmartCentres Real's long position.| Manulife Finl vs. Manulife Financial Corp | Manulife Finl vs. Manulife Fin Non | Manulife Finl vs. Great West Lifeco | Manulife Finl vs. Great West Lifeco |
| SmartCentres Real vs. RioCan Real Estate | SmartCentres Real vs. NorthWest Healthcare Properties | SmartCentres Real vs. HR Real Estate | SmartCentres Real vs. Choice Properties Real |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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