Correlation Between Manulife Financial and Corebridge Financial
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Corebridge Financial 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 Corebridge Financial 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 Corebridge Financial, you can compare the effects of market volatilities on Manulife Financial and Corebridge Financial 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 Corebridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Corebridge Financial.
Diversification Opportunities for Manulife Financial and Corebridge Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Corebridge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Corebridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corebridge 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 Corebridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corebridge Financial has no effect on the direction of Manulife Financial i.e., Manulife Financial and Corebridge Financial go up and down completely randomly.
Pair Corralation between Manulife Financial and Corebridge Financial
Considering the 90-day investment horizon Manulife Financial Corp is expected to generate 0.52 times more return on investment than Corebridge Financial. However, Manulife Financial Corp is 1.91 times less risky than Corebridge Financial. It trades about 0.17 of its potential returns per unit of risk. Corebridge Financial is currently generating about 0.01 per unit of risk. If you would invest 3,023 in Manulife Financial Corp on August 27, 2024 and sell it today you would earn a total of 173.00 from holding Manulife Financial Corp or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial Corp vs. Corebridge Financial
Performance |
| Timeline |
| Manulife Financial Corp |
| Corebridge Financial |
Manulife Financial and Corebridge Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Corebridge Financial
The main advantage of trading using opposite Manulife Financial and Corebridge Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Corebridge Financial 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 Corebridge Financial will offset losses from the drop in Corebridge Financial's long position.| Manulife Financial vs. Prudential Financial | Manulife Financial vs. MetLife | Manulife Financial vs. Unum Group | Manulife Financial vs. Jackson Financial |
| Corebridge Financial vs. Prudential Financial | Corebridge Financial vs. MetLife | Corebridge Financial vs. Unum Group | Corebridge Financial vs. Manulife Financial Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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