Correlation Between Manulife Fin and Great West
Can any of the company-specific risk be diversified away by investing in both Manulife Fin 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 Fin 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 Fin Non and Great West 365, you can compare the effects of market volatilities on Manulife Fin 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 Fin with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Fin and Great West.
Diversification Opportunities for Manulife Fin and Great West
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and Great is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Fin Non and Great West 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West 365 and Manulife Fin 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 Fin Non 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 365 has no effect on the direction of Manulife Fin i.e., Manulife Fin and Great West go up and down completely randomly.
Pair Corralation between Manulife Fin and Great West
Assuming the 90 days trading horizon Manulife Fin is expected to generate 1.28 times less return on investment than Great West. But when comparing it to its historical volatility, Manulife Fin Non is 1.68 times less risky than Great West. It trades about 0.01 of its potential returns per unit of risk. Great West 365 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,525 in Great West 365 on September 1, 2024 and sell it today you would lose (3.00) from holding Great West 365 or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Fin Non vs. Great West 365
Performance |
| Timeline |
| Manulife Fin Non |
| Great West 365 |
Manulife Fin and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Fin and Great West
The main advantage of trading using opposite Manulife Fin and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Fin 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 Fin vs. Leons Furniture Limited | Manulife Fin vs. Advent Wireless | Manulife Fin vs. Perseus Mining | Manulife Fin vs. Plaza Retail REIT |
| Great West vs. Manulife Financial Corp | Great West vs. Manulife Fin Non | Great West vs. Manulife Finl Srs | Great West vs. Great West Lifeco |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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