Correlation Between Manulife Financial and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and OPKO HEALTH 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 OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial and OPKO HEALTH, you can compare the effects of market volatilities on Manulife Financial and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and OPKO HEALTH.
Diversification Opportunities for Manulife Financial and OPKO HEALTH
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and OPKO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Manulife Financial i.e., Manulife Financial and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Manulife Financial and OPKO HEALTH
Assuming the 90 days horizon Manulife Financial is expected to generate 1.11 times less return on investment than OPKO HEALTH. But when comparing it to its historical volatility, Manulife Financial is 1.31 times less risky than OPKO HEALTH. It trades about 0.11 of its potential returns per unit of risk. OPKO HEALTH is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 93.00 in OPKO HEALTH on November 3, 2024 and sell it today you would earn a total of 50.00 from holding OPKO HEALTH or generate 53.76% 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. OPKO HEALTH
Performance |
| Timeline |
| Manulife Financial |
| OPKO HEALTH |
Manulife Financial and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and OPKO HEALTH
The main advantage of trading using opposite Manulife Financial and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| Manulife Financial vs. TreeHouse Foods | Manulife Financial vs. CN MODERN DAIRY | Manulife Financial vs. Nexstar Media Group | Manulife Financial vs. SENECA FOODS A |
| OPKO HEALTH vs. SIVERS SEMICONDUCTORS AB | OPKO HEALTH vs. NorAm Drilling AS | OPKO HEALTH vs. Volkswagen AG | OPKO HEALTH vs. Darden Restaurants |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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