Correlation Between Solar Alliance and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Solar Alliance 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 Solar Alliance and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solar Alliance Energy and Manulife Financial Corp, you can compare the effects of market volatilities on Solar Alliance 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 Solar Alliance with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and Manulife Financial.
Diversification Opportunities for Solar Alliance and Manulife Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solar and Manulife is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Solar Alliance 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 Solar Alliance Energy 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 Corp has no effect on the direction of Solar Alliance i.e., Solar Alliance and Manulife Financial go up and down completely randomly.
Pair Corralation between Solar Alliance and Manulife Financial
Assuming the 90 days trading horizon Solar Alliance Energy is not expected to generate positive returns. Moreover, Solar Alliance is 14.81 times more volatile than Manulife Financial Corp. It trades away all of its potential returns to assume current level of volatility. Manulife Financial Corp is currently generating about -0.13 per unit of risk. If you would invest 4.00 in Solar Alliance Energy on September 3, 2024 and sell it today you would lose (0.50) from holding Solar Alliance Energy or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solar Alliance Energy vs. Manulife Financial Corp
Performance |
| Timeline |
| Solar Alliance Energy |
| Manulife Financial Corp |
Solar Alliance and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar Alliance and Manulife Financial
The main advantage of trading using opposite Solar Alliance and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance 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.| Solar Alliance vs. Braille Energy Systems | Solar Alliance vs. Therma Bright | Solar Alliance vs. CryptoStar Corp | Solar Alliance vs. Manganese X Energy |
| Manulife Financial vs. Upstart Investments | Manulife Financial vs. Monument Mining Limited | Manulife Financial vs. Solid Impact Investments | Manulife Financial vs. NeXGold Mining Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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