Correlation Between NYSE Composite and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Manulife Financial Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Manulife Financial.
Diversification Opportunities for NYSE Composite and Manulife Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Manulife is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Manulife Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Manulife Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.98 times less return on investment than Manulife Financial. But when comparing it to its historical volatility, NYSE Composite is 2.44 times less risky than Manulife Financial. It trades about 0.21 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,023 in Manulife Financial Corp on August 27, 2024 and sell it today you would earn a total of 173.00 from holding Manulife Financial Corp or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Manulife Financial Corp
Performance |
| Timeline |
NYSE Composite and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Manulife Financial Corp
Pair trading matchups for Manulife Financial
Pair Trading with NYSE Composite and Manulife Financial
The main advantage of trading using opposite NYSE Composite and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Manulife Financial vs. Prudential Financial | Manulife Financial vs. MetLife | Manulife Financial vs. Unum Group | Manulife Financial vs. Jackson Financial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |