Correlation Between Manulife Financial and George Weston
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and George Weston 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 George Weston 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 George Weston 475, you can compare the effects of market volatilities on Manulife Financial and George Weston 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 George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and George Weston.
Diversification Opportunities for Manulife Financial and George Weston
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and George is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and George Weston 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston 475 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 George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston 475 has no effect on the direction of Manulife Financial i.e., Manulife Financial and George Weston go up and down completely randomly.
Pair Corralation between Manulife Financial and George Weston
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 1.94 times more return on investment than George Weston. However, Manulife Financial is 1.94 times more volatile than George Weston 475. It trades about 0.26 of its potential returns per unit of risk. George Weston 475 is currently generating about -0.11 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. George Weston 475
Performance |
| Timeline |
| Manulife Financial Corp |
| George Weston 475 |
Manulife Financial and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and George Weston
The main advantage of trading using opposite Manulife Financial and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, George Weston 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 George Weston will offset losses from the drop in George Weston'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 |
| George Weston vs. Canadian Utilities Limited | George Weston vs. Renoworks Software | George Weston vs. SalesforceCom CDR | George Weston vs. Imperial Metals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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