Correlation Between Monument Mining and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Manulife 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 Monument Mining and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and Manulife Financial Corp, you can compare the effects of market volatilities on Monument Mining and Manulife 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 Monument Mining with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Manulife Financial.
Diversification Opportunities for Monument Mining and Manulife Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monument and Manulife is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Monument Mining 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 Monument Mining Limited are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Monument Mining i.e., Monument Mining and Manulife Financial go up and down completely randomly.
Pair Corralation between Monument Mining and Manulife Financial
Assuming the 90 days horizon Monument Mining Limited is expected to generate 4.98 times more return on investment than Manulife Financial. However, Monument Mining is 4.98 times more volatile than Manulife Financial Corp. It trades about 0.07 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.07 per unit of risk. If you would invest 8.00 in Monument Mining Limited on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Monument Mining Limited or generate 225.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Manulife Financial Corp
Performance |
| Timeline |
| Monument Mining |
| Manulife Financial Corp |
Monument Mining and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Manulife Financial
The main advantage of trading using opposite Monument Mining and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Manulife 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. MAS Gold Corp |
| Manulife Financial vs. Upstart Investments | Manulife Financial vs. Monument Mining Limited | Manulife Financial vs. Solid Impact Investments | Manulife Financial vs. NeXGold Mining 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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