Correlation Between Manulife Financial and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and LFM Properties 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 LFM Properties 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 LFM Properties Corp, you can compare the effects of market volatilities on Manulife Financial and LFM Properties 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 LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and LFM Properties.
Diversification Opportunities for Manulife Financial and LFM Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and LFM is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and LFM Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LFM Properties 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 LFM Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LFM Properties Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and LFM Properties go up and down completely randomly.
Pair Corralation between Manulife Financial and LFM Properties
Assuming the 90 days trading horizon Manulife Financial is expected to generate 1.07 times less return on investment than LFM Properties. But when comparing it to its historical volatility, Manulife Financial Corp is 1.81 times less risky than LFM Properties. It trades about 0.08 of its potential returns per unit of risk. LFM Properties Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in LFM Properties Corp on August 25, 2024 and sell it today you would lose (0.40) from holding LFM Properties Corp or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.06% |
| Values | Daily Returns |
Manulife Financial Corp vs. LFM Properties Corp
Performance |
| Timeline |
| Manulife Financial Corp |
| LFM Properties Corp |
Manulife Financial and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and LFM Properties
The main advantage of trading using opposite Manulife Financial and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, LFM Properties 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 LFM Properties will offset losses from the drop in LFM Properties' long position.| Manulife Financial vs. National Reinsurance | Manulife Financial vs. Allhome Corp | Manulife Financial vs. Jollibee Foods Corp | Manulife Financial vs. LFM Properties Corp |
| LFM Properties vs. Concepcion Industrial Corp | LFM Properties vs. Converge Information Communications | LFM Properties vs. Transpacific Broadband Group | LFM Properties vs. Pacificonline Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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