Correlation Between Manulife Financial and Oculus VisionTech
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Oculus VisionTech 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 Oculus VisionTech 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 Oculus VisionTech, you can compare the effects of market volatilities on Manulife Financial and Oculus VisionTech 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 Oculus VisionTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Oculus VisionTech.
Diversification Opportunities for Manulife Financial and Oculus VisionTech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Oculus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Oculus VisionTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculus VisionTech 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 Oculus VisionTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculus VisionTech has no effect on the direction of Manulife Financial i.e., Manulife Financial and Oculus VisionTech go up and down completely randomly.
Pair Corralation between Manulife Financial and Oculus VisionTech
Assuming the 90 days trading horizon Manulife Financial is expected to generate 1.99 times less return on investment than Oculus VisionTech. But when comparing it to its historical volatility, Manulife Financial Corp is 8.26 times less risky than Oculus VisionTech. It trades about 0.13 of its potential returns per unit of risk. Oculus VisionTech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Oculus VisionTech on August 29, 2024 and sell it today you would lose (7.50) from holding Oculus VisionTech or give up 53.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Oculus VisionTech
Performance |
| Timeline |
| Manulife Financial Corp |
| Oculus VisionTech |
Manulife Financial and Oculus VisionTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Oculus VisionTech
The main advantage of trading using opposite Manulife Financial and Oculus VisionTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Oculus VisionTech 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 Oculus VisionTech will offset losses from the drop in Oculus VisionTech'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 |
| Oculus VisionTech vs. Berkshire Hathaway CDR | Oculus VisionTech vs. JPMorgan Chase Co | Oculus VisionTech vs. Bank of America | Oculus VisionTech vs. Alphabet Inc CDR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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