Correlation Between Manulife Financial and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Maiden Holdings 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 Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial and Maiden Holdings, you can compare the effects of market volatilities on Manulife Financial and Maiden Holdings 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Maiden Holdings.
Diversification Opportunities for Manulife Financial and Maiden Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and Maiden is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Manulife Financial i.e., Manulife Financial and Maiden Holdings go up and down completely randomly.
Pair Corralation between Manulife Financial and Maiden Holdings
Assuming the 90 days horizon Manulife Financial is expected to generate 0.32 times more return on investment than Maiden Holdings. However, Manulife Financial is 3.12 times less risky than Maiden Holdings. It trades about 0.21 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.17 per unit of risk. If you would invest 1,457 in Manulife Financial on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Manulife Financial or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Manulife Financial vs. Maiden Holdings
Performance |
| Timeline |
| Manulife Financial |
| Maiden Holdings |
Manulife Financial and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Financial and Maiden Holdings
The main advantage of trading using opposite Manulife Financial and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Manulife Financial vs. Maiden Holdings | Manulife Financial vs. MGIC Investment Corp | Manulife Financial vs. Cumberland Pharmaceuticals | Manulife Financial vs. Aspen Insurance Holdings |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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.
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