Correlation Between Shin Etsu and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Shin Etsu 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 Shin Etsu and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Etsu Chemical Co and Manulife Financial, you can compare the effects of market volatilities on Shin Etsu 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 Shin Etsu with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and Manulife Financial.
Diversification Opportunities for Shin Etsu and Manulife Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Manulife is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial and Shin Etsu 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 Shin Etsu Chemical Co 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 has no effect on the direction of Shin Etsu i.e., Shin Etsu and Manulife Financial go up and down completely randomly.
Pair Corralation between Shin Etsu and Manulife Financial
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to under-perform the Manulife Financial. In addition to that, Shin Etsu is 1.57 times more volatile than Manulife Financial. It trades about -0.02 of its total potential returns per unit of risk. Manulife Financial is currently generating about 0.05 per unit of volatility. If you would invest 2,975 in Manulife Financial on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Manulife Financial or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. Manulife Financial
Performance |
| Timeline |
| Shin Etsu Chemical |
| Manulife Financial |
Shin Etsu and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Etsu and Manulife Financial
The main advantage of trading using opposite Shin Etsu and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu 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.| Shin Etsu vs. AIR LIQUIDE ADR | Shin Etsu vs. Ganfeng Lithium Co | Shin Etsu vs. Superior Plus Corp | Shin Etsu vs. SIVERS SEMICONDUCTORS AB |
| Manulife Financial vs. Superior Plus Corp | Manulife Financial vs. SIVERS SEMICONDUCTORS AB | Manulife Financial vs. CHINA HUARONG ENERHD 50 | Manulife Financial vs. NORDIC HALIBUT AS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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