Correlation Between Manulife Multifactor and Brompton Global
Can any of the company-specific risk be diversified away by investing in both Manulife Multifactor and Brompton Global 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 Multifactor and Brompton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Multifactor Mid and Brompton Global Dividend, you can compare the effects of market volatilities on Manulife Multifactor and Brompton Global 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 Multifactor with a short position of Brompton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Multifactor and Brompton Global.
Diversification Opportunities for Manulife Multifactor and Brompton Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Manulife and Brompton is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Mid and Brompton Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Global Dividend and Manulife Multifactor 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 Multifactor Mid are associated (or correlated) with Brompton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Global Dividend has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Brompton Global go up and down completely randomly.
Pair Corralation between Manulife Multifactor and Brompton Global
Assuming the 90 days trading horizon Manulife Multifactor Mid is expected to generate 1.56 times more return on investment than Brompton Global. However, Manulife Multifactor is 1.56 times more volatile than Brompton Global Dividend. It trades about 0.08 of its potential returns per unit of risk. Brompton Global Dividend is currently generating about 0.11 per unit of risk. If you would invest 3,937 in Manulife Multifactor Mid on September 2, 2024 and sell it today you would earn a total of 1,587 from holding Manulife Multifactor Mid or generate 40.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 87.7% |
| Values | Daily Returns |
Manulife Multifactor Mid vs. Brompton Global Dividend
Performance |
| Timeline |
| Manulife Multifactor Mid |
| Brompton Global Dividend |
Manulife Multifactor and Brompton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manulife Multifactor and Brompton Global
The main advantage of trading using opposite Manulife Multifactor and Brompton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Multifactor position performs unexpectedly, Brompton Global 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 Brompton Global will offset losses from the drop in Brompton Global's long position.| Manulife Multifactor vs. Brompton Global Dividend | Manulife Multifactor vs. Global Healthcare Income | Manulife Multifactor vs. Tech Leaders Income | Manulife Multifactor vs. Brompton North American |
| Brompton Global vs. Global Healthcare Income | Brompton Global vs. Brompton European Dividend | Brompton Global vs. Forstrong Global Income | Brompton Global vs. iShares Canadian HYBrid |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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