Correlation Between Manulife Financial and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and GoGold Resources 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 GoGold Resources 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 GoGold Resources, you can compare the effects of market volatilities on Manulife Financial and GoGold Resources 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 GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and GoGold Resources.
Diversification Opportunities for Manulife Financial and GoGold Resources
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and GoGold is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources 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 GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Manulife Financial i.e., Manulife Financial and GoGold Resources go up and down completely randomly.
Pair Corralation between Manulife Financial and GoGold Resources
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.33 times more return on investment than GoGold Resources. However, Manulife Financial Corp is 3.01 times less risky than GoGold Resources. It trades about -0.12 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.2 per unit of risk. If you would invest 4,505 in Manulife Financial Corp on September 19, 2024 and sell it today you would lose (103.00) from holding Manulife Financial Corp or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. GoGold Resources
Performance |
| Timeline |
| Manulife Financial Corp |
| GoGold Resources |
Manulife Financial and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and GoGold Resources
The main advantage of trading using opposite Manulife Financial and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Manulife Financial vs. Bank of Nova | Manulife Financial vs. Sun Life Financial | Manulife Financial vs. Toronto Dominion Bank | Manulife Financial vs. Royal Bank of |
| GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Liberty Gold Corp | GoGold Resources vs. Dolly Varden Silver | GoGold Resources vs. Minaurum Gold |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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