Correlation Between Manulife Financial and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Manulife Finl 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 Manulife Finl 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 Manulife Finl Srs, you can compare the effects of market volatilities on Manulife Financial and Manulife Finl 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 Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Manulife Finl.
Diversification Opportunities for Manulife Financial and Manulife Finl
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Manulife is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs 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 Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Manulife Financial i.e., Manulife Financial and Manulife Finl go up and down completely randomly.
Pair Corralation between Manulife Financial and Manulife Finl
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.76 times more return on investment than Manulife Finl. However, Manulife Financial Corp is 1.31 times less risky than Manulife Finl. It trades about -0.22 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about -0.23 per unit of risk. If you would invest 2,346 in Manulife Financial Corp on August 29, 2024 and sell it today you would lose (61.00) from holding Manulife Financial Corp or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Manulife Finl Srs
Performance |
| Timeline |
| Manulife Financial Corp |
| Manulife Finl Srs |
Manulife Financial and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Manulife Finl
The main advantage of trading using opposite Manulife Financial and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Manulife Finl 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 Manulife Finl will offset losses from the drop in Manulife Finl's long position.| Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Great West Lifeco | Manulife Financial vs. Great West Lifeco |
| Manulife Finl vs. Manulife Financial Corp | Manulife Finl vs. Great West Lifeco | Manulife Finl 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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