Correlation Between Pembina Pipeline and Manulife Fin
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Manulife Fin 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 Pembina Pipeline and Manulife Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and Manulife Fin Non, you can compare the effects of market volatilities on Pembina Pipeline and Manulife Fin 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 Pembina Pipeline with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Manulife Fin.
Diversification Opportunities for Pembina Pipeline and Manulife Fin
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pembina and Manulife is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Manulife Fin Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Fin Non and Pembina Pipeline 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 Pembina Pipeline Corp are associated (or correlated) with Manulife Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Fin Non has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Manulife Fin go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Manulife Fin
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 1.47 times more return on investment than Manulife Fin. However, Pembina Pipeline is 1.47 times more volatile than Manulife Fin Non. It trades about 0.11 of its potential returns per unit of risk. Manulife Fin Non is currently generating about 0.0 per unit of risk. If you would invest 2,235 in Pembina Pipeline Corp on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Pembina Pipeline Corp or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Manulife Fin Non
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Manulife Fin Non |
Pembina Pipeline and Manulife Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Manulife Fin
The main advantage of trading using opposite Pembina Pipeline and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Manulife Fin 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 Fin will offset losses from the drop in Manulife Fin's long position.| Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp |
| Manulife Fin vs. UnitedHealth Group CDR | Manulife Fin vs. Northstar Clean Technologies | Manulife Fin vs. Perseus Mining | Manulife Fin vs. NorthWest Healthcare Properties |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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