Correlation Between Manning Napier and Rainier International
Can any of the company-specific risk be diversified away by investing in both Manning Napier and Rainier International 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 Manning Napier and Rainier International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manning Napier Rainier and Rainier International Discovery, you can compare the effects of market volatilities on Manning Napier and Rainier International 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 Manning Napier with a short position of Rainier International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manning Napier and Rainier International.
Diversification Opportunities for Manning Napier and Rainier International
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Manning and Rainier is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Manning Napier Rainier and Rainier International Discover in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainier International and Manning Napier 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 Manning Napier Rainier are associated (or correlated) with Rainier International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainier International has no effect on the direction of Manning Napier i.e., Manning Napier and Rainier International go up and down completely randomly.
Pair Corralation between Manning Napier and Rainier International
Assuming the 90 days horizon Manning Napier Rainier is expected to generate 1.0 times more return on investment than Rainier International. However, Manning Napier Rainier is 1.0 times less risky than Rainier International. It trades about -0.01 of its potential returns per unit of risk. Rainier International Discovery is currently generating about -0.02 per unit of risk. If you would invest 2,359 in Manning Napier Rainier on August 30, 2024 and sell it today you would lose (4.00) from holding Manning Napier Rainier or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manning Napier Rainier vs. Rainier International Discover
Performance |
| Timeline |
| Manning Napier Rainier |
| Rainier International |
Manning Napier and Rainier International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manning Napier and Rainier International
The main advantage of trading using opposite Manning Napier and Rainier International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manning Napier position performs unexpectedly, Rainier International 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 Rainier International will offset losses from the drop in Rainier International's long position.| Manning Napier vs. Manning Napier Core | Manning Napier vs. Manning Napier Core | Manning Napier vs. Manning Napier Credit | Manning Napier vs. Manning Napier Callodine |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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