Correlation Between Manulife Financial and Catalent
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Catalent 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 Catalent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial and Catalent, you can compare the effects of market volatilities on Manulife Financial and Catalent 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 Catalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Catalent.
Diversification Opportunities for Manulife Financial and Catalent
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and Catalent is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and Catalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalent 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 Catalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalent has no effect on the direction of Manulife Financial i.e., Manulife Financial and Catalent go up and down completely randomly.
Pair Corralation between Manulife Financial and Catalent
Assuming the 90 days horizon Manulife Financial is expected to under-perform the Catalent. In addition to that, Manulife Financial is 1.32 times more volatile than Catalent. It trades about -0.06 of its total potential returns per unit of risk. Catalent is currently generating about 0.13 per unit of volatility. If you would invest 4,189 in Catalent on September 12, 2024 and sell it today you would earn a total of 2,035 from holding Catalent or generate 48.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manulife Financial vs. Catalent
Performance |
| Timeline |
| Manulife Financial |
| Catalent |
Manulife Financial and Catalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Catalent
The main advantage of trading using opposite Manulife Financial and Catalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Catalent 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 Catalent will offset losses from the drop in Catalent's long position.| Manulife Financial vs. Catalent | Manulife Financial vs. Electrovaya Common Shares | Manulife Financial vs. Jacobs Solutions | Manulife Financial vs. Sabre Corpo |
| Catalent vs. Evoke Pharma | Catalent vs. Lantheus Holdings | Catalent vs. ANI Pharmaceuticals | Catalent vs. Ironwood Pharmaceuticals |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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