Correlation Between Manulife Financial and Abacus Life
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Abacus 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 Abacus 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 Abacus Life, you can compare the effects of market volatilities on Manulife Financial and Abacus 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 Abacus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Abacus Life.
Diversification Opportunities for Manulife Financial and Abacus Life
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Manulife and Abacus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Abacus Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Life 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 Abacus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Life has no effect on the direction of Manulife Financial i.e., Manulife Financial and Abacus Life go up and down completely randomly.
Pair Corralation between Manulife Financial and Abacus Life
Considering the 90-day investment horizon Manulife Financial Corp is expected to generate 0.4 times more return on investment than Abacus Life. However, Manulife Financial Corp is 2.51 times less risky than Abacus Life. It trades about 0.19 of its potential returns per unit of risk. Abacus Life is currently generating about -0.06 per unit of risk. If you would invest 2,996 in Manulife Financial Corp on August 31, 2024 and sell it today you would earn a total of 193.00 from holding Manulife Financial Corp or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Abacus Life
Performance |
| Timeline |
| Manulife Financial Corp |
| Abacus Life |
Manulife Financial and Abacus Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Abacus Life
The main advantage of trading using opposite Manulife Financial and Abacus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Abacus 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 Abacus Life will offset losses from the drop in Abacus Life's long position.| Manulife Financial vs. Prudential Financial | Manulife Financial vs. MetLife | Manulife Financial vs. Unum Group | Manulife Financial vs. Jackson Financial |
| Abacus Life vs. FG Annuities Life | Abacus Life vs. Globe Life | Abacus Life vs. MetLife Preferred Stock | Abacus Life vs. MetLife Preferred Stock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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