Correlation Between Manulife Financial and Sun Life
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Manulife Financial and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Sun Life.
Diversification Opportunities for Manulife Financial and Sun Life
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Manulife and Sun is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Manulife Financial i.e., Manulife Financial and Sun Life go up and down completely randomly.
Pair Corralation between Manulife Financial and Sun Life
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 1.27 times more return on investment than Sun Life. However, Manulife Financial is 1.27 times more volatile than Sun Life Financial. It trades about -0.04 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.07 per unit of risk. If you would invest 4,394 in Manulife Financial Corp on November 3, 2024 and sell it today you would lose (48.00) from holding Manulife Financial Corp or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Sun Life Financial
Performance |
| Timeline |
| Manulife Financial Corp |
| Sun Life Financial |
Manulife Financial and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Sun Life
The main advantage of trading using opposite Manulife Financial and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life'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 |
| Sun Life vs. Manulife Financial Corp | Sun Life vs. Great West Lifeco | Sun Life vs. National Bank of | Sun Life vs. Canadian Imperial Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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