Correlation Between Tokyu Construction and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Tokyu Construction 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 Tokyu Construction and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyu Construction Co and Manulife Financial, you can compare the effects of market volatilities on Tokyu Construction 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 Tokyu Construction with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyu Construction and Manulife Financial.
Diversification Opportunities for Tokyu Construction and Manulife Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tokyu and Manulife is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tokyu Construction Co and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial and Tokyu Construction 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 Tokyu Construction 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 Tokyu Construction i.e., Tokyu Construction and Manulife Financial go up and down completely randomly.
Pair Corralation between Tokyu Construction and Manulife Financial
Assuming the 90 days horizon Tokyu Construction is expected to generate 4.27 times less return on investment than Manulife Financial. But when comparing it to its historical volatility, Tokyu Construction Co is 1.21 times less risky than Manulife Financial. It trades about 0.06 of its potential returns per unit of risk. Manulife Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,034 in Manulife Financial on November 3, 2024 and sell it today you would earn a total of 884.00 from holding Manulife Financial or generate 43.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokyu Construction Co vs. Manulife Financial
Performance |
| Timeline |
| Tokyu Construction |
| Manulife Financial |
Tokyu Construction and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyu Construction and Manulife Financial
The main advantage of trading using opposite Tokyu Construction and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyu Construction 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.| Tokyu Construction vs. Vinci S A | Tokyu Construction vs. Johnson Controls International | Tokyu Construction vs. Larsen Toubro Limited | Tokyu Construction vs. China Railway Group |
| Manulife Financial vs. TreeHouse Foods | Manulife Financial vs. CN MODERN DAIRY | Manulife Financial vs. Nexstar Media Group | Manulife Financial vs. SENECA FOODS A |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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