Correlation Between Manulife Financial and TITAN MACHINERY
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and TITAN MACHINERY 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 TITAN MACHINERY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial and TITAN MACHINERY, you can compare the effects of market volatilities on Manulife Financial and TITAN MACHINERY 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 TITAN MACHINERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and TITAN MACHINERY.
Diversification Opportunities for Manulife Financial and TITAN MACHINERY
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and TITAN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY 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 are associated (or correlated) with TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of Manulife Financial i.e., Manulife Financial and TITAN MACHINERY go up and down completely randomly.
Pair Corralation between Manulife Financial and TITAN MACHINERY
Assuming the 90 days horizon Manulife Financial is expected to generate 0.48 times more return on investment than TITAN MACHINERY. However, Manulife Financial is 2.09 times less risky than TITAN MACHINERY. It trades about 0.1 of its potential returns per unit of risk. TITAN MACHINERY is currently generating about -0.04 per unit of risk. If you would invest 1,470 in Manulife Financial on October 11, 2024 and sell it today you would earn a total of 1,477 from holding Manulife Financial or generate 100.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial vs. TITAN MACHINERY
Performance |
| Timeline |
| Manulife Financial |
| TITAN MACHINERY |
Manulife Financial and TITAN MACHINERY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and TITAN MACHINERY
The main advantage of trading using opposite Manulife Financial and TITAN MACHINERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, TITAN MACHINERY 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 TITAN MACHINERY will offset losses from the drop in TITAN MACHINERY's long position.| Manulife Financial vs. ORMAT TECHNOLOGIES | Manulife Financial vs. COPLAND ROAD CAPITAL | Manulife Financial vs. Uber Technologies | Manulife Financial vs. GOLD ROAD RES |
| TITAN MACHINERY vs. Shenandoah Telecommunications | TITAN MACHINERY vs. AVITA Medical | TITAN MACHINERY vs. IMAGIN MEDICAL INC | TITAN MACHINERY vs. MeVis Medical Solutions |
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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