Correlation Between National Bank and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Manulife Financial Corp, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Manulife Financial.
Diversification Opportunities for National Bank and Manulife Financial
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Manulife is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National Bank 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 National Bank of 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 National Bank i.e., National Bank and Manulife Financial go up and down completely randomly.
Pair Corralation between National Bank and Manulife Financial
Assuming the 90 days horizon National Bank of is expected to generate 1.53 times more return on investment than Manulife Financial. However, National Bank is 1.53 times more volatile than Manulife Financial Corp. It trades about 0.17 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.11 per unit of risk. If you would invest 10,375 in National Bank of on September 1, 2024 and sell it today you would earn a total of 3,496 from holding National Bank of or generate 33.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Manulife Financial Corp
Performance |
| Timeline |
| National Bank |
| Manulife Financial Corp |
National Bank and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Manulife Financial
The main advantage of trading using opposite National Bank and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Canadian Imperial Bank | National Bank vs. Bank of Montreal | National Bank vs. Royal Bank of | National Bank vs. Bank of Nova |
| Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Fin Non | Manulife Financial vs. Manulife Finl Srs | Manulife Financial vs. Great West Lifeco |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |