Correlation Between Manulife Fin and Great Wes
Can any of the company-specific risk be diversified away by investing in both Manulife Fin and Great Wes 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 Wes 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 Wes 515, you can compare the effects of market volatilities on Manulife Fin and Great Wes 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 Wes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Fin and Great Wes.
Diversification Opportunities for Manulife Fin and Great Wes
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Great is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Fin Non and Great Wes 515 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wes 515 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 Wes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wes 515 has no effect on the direction of Manulife Fin i.e., Manulife Fin and Great Wes go up and down completely randomly.
Pair Corralation between Manulife Fin and Great Wes
Assuming the 90 days trading horizon Manulife Fin is expected to generate 8.71 times less return on investment than Great Wes. In addition to that, Manulife Fin is 1.54 times more volatile than Great Wes 515. It trades about 0.01 of its total potential returns per unit of risk. Great Wes 515 is currently generating about 0.11 per unit of volatility. If you would invest 1,988 in Great Wes 515 on September 1, 2024 and sell it today you would earn a total of 159.00 from holding Great Wes 515 or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Fin Non vs. Great Wes 515
Performance |
| Timeline |
| Manulife Fin Non |
| Great Wes 515 |
Manulife Fin and Great Wes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Fin and Great Wes
The main advantage of trading using opposite Manulife Fin and Great Wes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Fin position performs unexpectedly, Great Wes 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 Wes will offset losses from the drop in Great Wes' 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 Wes vs. Algoma Steel Group | Great Wes vs. Perseus Mining | Great Wes vs. Primaris Retail RE | Great Wes vs. Lion One Metals |
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 Stocks Directory module to find actively traded stocks across global markets.
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