Correlation Between Manulife Financial and Jade Leader
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Jade Leader 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 Jade Leader 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 Jade Leader Corp, you can compare the effects of market volatilities on Manulife Financial and Jade Leader 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 Jade Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Jade Leader.
Diversification Opportunities for Manulife Financial and Jade Leader
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manulife and Jade is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Jade Leader Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Leader 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 Jade Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Leader Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and Jade Leader go up and down completely randomly.
Pair Corralation between Manulife Financial and Jade Leader
Assuming the 90 days trading horizon Manulife Financial is expected to generate 1.9 times less return on investment than Jade Leader. But when comparing it to its historical volatility, Manulife Financial Corp is 10.0 times less risky than Jade Leader. It trades about 0.1 of its potential returns per unit of risk. Jade Leader Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Jade Leader Corp on October 24, 2024 and sell it today you would lose (1.00) from holding Jade Leader Corp or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Jade Leader Corp
Performance |
| Timeline |
| Manulife Financial Corp |
| Jade Leader Corp |
Manulife Financial and Jade Leader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Jade Leader
The main advantage of trading using opposite Manulife Financial and Jade Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Jade Leader 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 Jade Leader will offset losses from the drop in Jade Leader's long position.| Manulife Financial vs. Richelieu Hardware | Manulife Financial vs. CVW CleanTech | Manulife Financial vs. Calian Technologies | Manulife Financial vs. Caribbean Utilities |
| Jade Leader vs. Manulife Financial Corp | Jade Leader vs. Guru Organic Energy | Jade Leader vs. Toronto Dominion Bank | Jade Leader vs. Income Financial Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |