Correlation Between Manulife Financial and Security Bank
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Security Bank 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 Security Bank 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 Security Bank Corp, you can compare the effects of market volatilities on Manulife Financial and Security Bank 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 Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Security Bank.
Diversification Opportunities for Manulife Financial and Security Bank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Manulife and Security is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank 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 Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and Security Bank go up and down completely randomly.
Pair Corralation between Manulife Financial and Security Bank
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 2.41 times more return on investment than Security Bank. However, Manulife Financial is 2.41 times more volatile than Security Bank Corp. It trades about 0.17 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.06 per unit of risk. If you would invest 172,373 in Manulife Financial Corp on September 3, 2024 and sell it today you would earn a total of 26,627 from holding Manulife Financial Corp or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Manulife Financial Corp vs. Security Bank Corp
Performance |
| Timeline |
| Manulife Financial Corp |
| Security Bank Corp |
Manulife Financial and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Security Bank
The main advantage of trading using opposite Manulife Financial and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| Manulife Financial vs. Sun Life Financial | Manulife Financial vs. National Reinsurance | Manulife Financial vs. GT Capital Holdings | Manulife Financial vs. Allhome Corp |
| Security Bank vs. Converge Information Communications | Security Bank vs. Asia United Bank | Security Bank vs. Suntrust Home Developers | Security Bank vs. Lepanto Consolidated Mining |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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