Correlation Between Manulife Financial and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Capstone Mining 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 Financial and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial Corp and Capstone Mining Corp, you can compare the effects of market volatilities on Manulife Financial and Capstone Mining 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 Financial with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Capstone Mining.
Diversification Opportunities for Manulife Financial and Capstone Mining
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manulife and Capstone is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and Manulife Financial 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 Financial Corp are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and Capstone Mining go up and down completely randomly.
Pair Corralation between Manulife Financial and Capstone Mining
Assuming the 90 days trading horizon Manulife Financial is expected to generate 2.16 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, Manulife Financial Corp is 2.68 times less risky than Capstone Mining. It trades about 0.08 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 477.00 in Capstone Mining Corp on September 4, 2024 and sell it today you would earn a total of 476.00 from holding Capstone Mining Corp or generate 99.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Capstone Mining Corp
Performance |
| Timeline |
| Manulife Financial Corp |
| Capstone Mining Corp |
Manulife Financial and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Capstone Mining
The main advantage of trading using opposite Manulife Financial and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| Manulife Financial vs. Bank of Nova | Manulife Financial vs. Financial 15 Split | Manulife Financial vs. Canadian Imperial Bank | Manulife Financial vs. CI Financial Corp |
| Capstone Mining vs. First Majestic Silver | Capstone Mining vs. Ivanhoe Energy | Capstone Mining vs. Orezone Gold Corp | Capstone Mining vs. Faraday Copper 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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