Correlation Between Pembina Pipeline and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Manulife Finl 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 Finl 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 Finl Srs, you can compare the effects of market volatilities on Pembina Pipeline and Manulife Finl 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 Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Manulife Finl.
Diversification Opportunities for Pembina Pipeline and Manulife Finl
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pembina and Manulife is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs 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 Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Manulife Finl go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Manulife Finl
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 1.07 times more return on investment than Manulife Finl. However, Pembina Pipeline is 1.07 times more volatile than Manulife Finl Srs. It trades about 0.08 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about 0.04 per unit of risk. If you would invest 4,216 in Pembina Pipeline Corp on August 27, 2024 and sell it today you would earn a total of 1,785 from holding Pembina Pipeline Corp or generate 42.34% 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 Finl Srs
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Manulife Finl Srs |
Pembina Pipeline and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Manulife Finl
The main advantage of trading using opposite Pembina Pipeline and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Manulife Finl 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 Finl will offset losses from the drop in Manulife Finl's long position.| Pembina Pipeline vs. Definity Financial Corp | Pembina Pipeline vs. Canadian Imperial Bank | Pembina Pipeline vs. Financial 15 Split | Pembina Pipeline vs. Royal Bank of |
| Manulife Finl vs. Canadian Imperial Bank | Manulife Finl vs. Pembina Pipeline Corp | Manulife Finl vs. HPQ Silicon Resources | Manulife Finl vs. Bank of Nova |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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