Correlation Between Royal Bank and Manulife Fin
Can any of the company-specific risk be diversified away by investing in both Royal Bank 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 Royal Bank and Manulife Fin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Bank of and Manulife Fin Non, you can compare the effects of market volatilities on Royal Bank 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 Royal Bank with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Manulife Fin.
Diversification Opportunities for Royal Bank and Manulife Fin
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royal and Manulife is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of 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 Royal Bank 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 Royal Bank of 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 Royal Bank i.e., Royal Bank and Manulife Fin go up and down completely randomly.
Pair Corralation between Royal Bank and Manulife Fin
Assuming the 90 days trading horizon Royal Bank of is expected to generate 0.68 times more return on investment than Manulife Fin. However, Royal Bank of is 1.47 times less risky than Manulife Fin. It trades about 0.33 of its potential returns per unit of risk. Manulife Fin Non is currently generating about -0.1 per unit of risk. If you would invest 2,531 in Royal Bank of on November 27, 2024 and sell it today you would earn a total of 59.00 from holding Royal Bank of or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. Manulife Fin Non
Performance |
| Timeline |
| Royal Bank |
| Manulife Fin Non |
Royal Bank and Manulife Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Manulife Fin
The main advantage of trading using opposite Royal Bank and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank 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.| Royal Bank vs. Jamieson Wellness | Royal Bank vs. Canadian Utilities Limited | Royal Bank vs. Computer Modelling Group | Royal Bank vs. Gfl Environmental Holdings |
| Manulife Fin vs. Titanium Transportation Group | Manulife Fin vs. Magna Mining | Manulife Fin vs. Champion Gaming Group | Manulife Fin vs. Adex Mining |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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