Correlation Between Manulife Financial and TWC Enterprises
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and TWC Enterprises 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 TWC Enterprises 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 TWC Enterprises, you can compare the effects of market volatilities on Manulife Financial and TWC Enterprises 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 TWC Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and TWC Enterprises.
Diversification Opportunities for Manulife Financial and TWC Enterprises
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and TWC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and TWC Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWC Enterprises 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 TWC Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWC Enterprises has no effect on the direction of Manulife Financial i.e., Manulife Financial and TWC Enterprises go up and down completely randomly.
Pair Corralation between Manulife Financial and TWC Enterprises
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.79 times more return on investment than TWC Enterprises. However, Manulife Financial Corp is 1.27 times less risky than TWC Enterprises. It trades about 0.18 of its potential returns per unit of risk. TWC Enterprises is currently generating about 0.0 per unit of risk. If you would invest 3,448 in Manulife Financial Corp on September 13, 2024 and sell it today you would earn a total of 1,012 from holding Manulife Financial Corp or generate 29.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. TWC Enterprises
Performance |
| Timeline |
| Manulife Financial Corp |
| TWC Enterprises |
Manulife Financial and TWC Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and TWC Enterprises
The main advantage of trading using opposite Manulife Financial and TWC Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, TWC Enterprises 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 TWC Enterprises will offset losses from the drop in TWC Enterprises' 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 |
| TWC Enterprises vs. BMTC Group | TWC Enterprises vs. Morguard | TWC Enterprises vs. Tree Island Steel | TWC Enterprises vs. Clairvest Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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