Correlation Between Manulife Financial and NeuPath Health
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and NeuPath Health 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 NeuPath Health 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 NeuPath Health, you can compare the effects of market volatilities on Manulife Financial and NeuPath Health 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 NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and NeuPath Health.
Diversification Opportunities for Manulife Financial and NeuPath Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and NeuPath is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health 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 NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of Manulife Financial i.e., Manulife Financial and NeuPath Health go up and down completely randomly.
Pair Corralation between Manulife Financial and NeuPath Health
Assuming the 90 days trading horizon Manulife Financial is expected to generate 1.72 times less return on investment than NeuPath Health. But when comparing it to its historical volatility, Manulife Financial Corp is 3.16 times less risky than NeuPath Health. It trades about 0.07 of its potential returns per unit of risk. NeuPath Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17.00 in NeuPath Health on October 16, 2024 and sell it today you would earn a total of 4.00 from holding NeuPath Health or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. NeuPath Health
Performance |
| Timeline |
| Manulife Financial Corp |
| NeuPath Health |
Manulife Financial and NeuPath Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and NeuPath Health
The main advantage of trading using opposite Manulife Financial and NeuPath Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, NeuPath Health 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 NeuPath Health will offset losses from the drop in NeuPath Health's long position.| Manulife Financial vs. Diversified Royalty Corp | Manulife Financial vs. Atrium Mortgage Investment | Manulife Financial vs. CNJ Capital Investments | Manulife Financial vs. Bausch Health Companies |
| NeuPath Health vs. Bird Construction | NeuPath Health vs. Forsys Metals Corp | NeuPath Health vs. Brookfield Office Properties | NeuPath Health vs. iSign Media Solutions |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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