Correlation Between Manulife Financial and Converge Information
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Manulife Financial and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Converge Information.
Diversification Opportunities for Manulife Financial and Converge Information
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Manulife and Converge is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Manulife Financial i.e., Manulife Financial and Converge Information go up and down completely randomly.
Pair Corralation between Manulife Financial and Converge Information
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 1.96 times more return on investment than Converge Information. However, Manulife Financial is 1.96 times more volatile than Converge Information Communications. It trades about 0.21 of its potential returns per unit of risk. Converge Information Communications is currently generating about 0.07 per unit of risk. If you would invest 130,766 in Manulife Financial Corp on September 2, 2024 and sell it today you would earn a total of 68,234 from holding Manulife Financial Corp or generate 52.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.85% |
| Values | Daily Returns |
Manulife Financial Corp vs. Converge Information Communica
Performance |
| Timeline |
| Manulife Financial Corp |
| Converge Information |
Manulife Financial and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Converge Information
The main advantage of trading using opposite Manulife Financial and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Manulife Financial vs. GT Capital Holdings | Manulife Financial vs. Allhome Corp | Manulife Financial vs. Jollibee Foods Corp | Manulife Financial vs. LFM Properties Corp |
| Converge Information vs. Dito CME Holdings | Converge Information vs. Allhome Corp | Converge Information vs. LFM Properties Corp | Converge Information vs. Altus Property Ventures |
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 CEOs Directory module to screen CEOs from public companies around the world.
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