Correlation Between Manulife Financial and Questor Technology
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Questor Technology 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 Questor Technology 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 Questor Technology, you can compare the effects of market volatilities on Manulife Financial and Questor Technology 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 Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Questor Technology.
Diversification Opportunities for Manulife Financial and Questor Technology
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Manulife and Questor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology 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 Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Manulife Financial i.e., Manulife Financial and Questor Technology go up and down completely randomly.
Pair Corralation between Manulife Financial and Questor Technology
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.27 times more return on investment than Questor Technology. However, Manulife Financial Corp is 3.72 times less risky than Questor Technology. It trades about 0.26 of its potential returns per unit of risk. Questor Technology is currently generating about -0.23 per unit of risk. If you would invest 1,725 in Manulife Financial Corp on November 4, 2024 and sell it today you would earn a total of 125.00 from holding Manulife Financial Corp or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Questor Technology
Performance |
| Timeline |
| Manulife Financial Corp |
| Questor Technology |
Manulife Financial and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Questor Technology
The main advantage of trading using opposite Manulife Financial and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| Manulife Financial vs. Berkshire Hathaway CDR | Manulife Financial vs. Apple Inc CDR | Manulife Financial vs. Microsoft Corp CDR | Manulife Financial vs. Alphabet Inc CDR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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