Correlation Between Northview Residential and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Northview Residential 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 Northview Residential and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northview Residential REIT and Manulife Financial Corp, you can compare the effects of market volatilities on Northview Residential 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 Northview Residential with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and Manulife Financial.
Diversification Opportunities for Northview Residential and Manulife Financial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northview and Manulife is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT 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 Northview Residential 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 Northview Residential REIT 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 Northview Residential i.e., Northview Residential and Manulife Financial go up and down completely randomly.
Pair Corralation between Northview Residential and Manulife Financial
Assuming the 90 days trading horizon Northview Residential REIT is expected to under-perform the Manulife Financial. In addition to that, Northview Residential is 2.0 times more volatile than Manulife Financial Corp. It trades about -0.2 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.46 per unit of volatility. If you would invest 2,161 in Manulife Financial Corp on November 2, 2024 and sell it today you would earn a total of 131.00 from holding Manulife Financial Corp or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Northview Residential REIT vs. Manulife Financial Corp
Performance |
| Timeline |
| Northview Residential |
| Manulife Financial Corp |
Northview Residential and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northview Residential and Manulife Financial
The main advantage of trading using opposite Northview Residential and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northview Residential 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.| Northview Residential vs. Canlan Ice Sports | Northview Residential vs. Maple Leaf Foods | Northview Residential vs. Nicola Mining | Northview Residential vs. NeXGold Mining Corp |
| Manulife Financial vs. Prime Dividend Corp | Manulife Financial vs. Canadian Life Companies | Manulife Financial vs. Financial 15 Split | Manulife Financial vs. Dividend 15 Split |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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