Correlation Between Manulife Financial and JEMTEC
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and JEMTEC 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 JEMTEC 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 JEMTEC Inc, you can compare the effects of market volatilities on Manulife Financial and JEMTEC 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 JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and JEMTEC.
Diversification Opportunities for Manulife Financial and JEMTEC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Manulife and JEMTEC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc 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 JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of Manulife Financial i.e., Manulife Financial and JEMTEC go up and down completely randomly.
Pair Corralation between Manulife Financial and JEMTEC
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.33 times more return on investment than JEMTEC. However, Manulife Financial Corp is 3.05 times less risky than JEMTEC. It trades about 0.12 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.01 per unit of risk. If you would invest 2,226 in Manulife Financial Corp on September 14, 2024 and sell it today you would earn a total of 2,159 from holding Manulife Financial Corp or generate 96.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Manulife Financial Corp vs. JEMTEC Inc
Performance |
| Timeline |
| Manulife Financial Corp |
| JEMTEC Inc |
Manulife Financial and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and JEMTEC
The main advantage of trading using opposite Manulife Financial and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's 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 |
| JEMTEC vs. HPQ Silicon Resources | JEMTEC vs. WELL Health Technologies | JEMTEC vs. Major Drilling Group | JEMTEC vs. Orbit Garant Drilling |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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