Correlation Between Manulife Financial and PREMIER FOODS
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and PREMIER FOODS 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 PREMIER FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial and PREMIER FOODS, you can compare the effects of market volatilities on Manulife Financial and PREMIER FOODS 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 PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and PREMIER FOODS.
Diversification Opportunities for Manulife Financial and PREMIER FOODS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manulife and PREMIER is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS 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 PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of Manulife Financial i.e., Manulife Financial and PREMIER FOODS go up and down completely randomly.
Pair Corralation between Manulife Financial and PREMIER FOODS
Assuming the 90 days horizon Manulife Financial is expected to generate 1.2 times more return on investment than PREMIER FOODS. However, Manulife Financial is 1.2 times more volatile than PREMIER FOODS. It trades about 0.13 of its potential returns per unit of risk. PREMIER FOODS is currently generating about 0.12 per unit of risk. If you would invest 1,784 in Manulife Financial on September 14, 2024 and sell it today you would earn a total of 1,185 from holding Manulife Financial or generate 66.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial vs. PREMIER FOODS
Performance |
| Timeline |
| Manulife Financial |
| PREMIER FOODS |
Manulife Financial and PREMIER FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and PREMIER FOODS
The main advantage of trading using opposite Manulife Financial and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS's long position.| Manulife Financial vs. Take Two Interactive Software | Manulife Financial vs. Constellation Software | Manulife Financial vs. VITEC SOFTWARE GROUP | Manulife Financial vs. UPDATE SOFTWARE |
| PREMIER FOODS vs. Federal Agricultural Mortgage | PREMIER FOODS vs. DAIRY FARM INTL | PREMIER FOODS vs. Sterling Construction | PREMIER FOODS vs. CITY OFFICE REIT |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |