Correlation Between TeraGo and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both TeraGo 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 TeraGo and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TeraGo Inc and Manulife Financial Corp, you can compare the effects of market volatilities on TeraGo 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 TeraGo with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TeraGo and Manulife Financial.
Diversification Opportunities for TeraGo and Manulife Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TeraGo and Manulife is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc 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 TeraGo 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 TeraGo Inc 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 TeraGo i.e., TeraGo and Manulife Financial go up and down completely randomly.
Pair Corralation between TeraGo and Manulife Financial
Assuming the 90 days trading horizon TeraGo Inc is expected to under-perform the Manulife Financial. In addition to that, TeraGo is 6.19 times more volatile than Manulife Financial Corp. It trades about -0.1 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.01 per unit of volatility. If you would invest 2,396 in Manulife Financial Corp on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Manulife Financial Corp or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TeraGo Inc vs. Manulife Financial Corp
Performance |
| Timeline |
| TeraGo Inc |
| Manulife Financial Corp |
TeraGo and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TeraGo and Manulife Financial
The main advantage of trading using opposite TeraGo and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TeraGo 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.| TeraGo vs. Evertz Technologies Limited | TeraGo vs. Vecima Networks | TeraGo vs. EcoSynthetix | TeraGo vs. Baylin Technologies |
| Manulife Financial vs. Royal Helium | Manulife Financial vs. Vista Gold | Manulife Financial vs. Excellon Resources | Manulife Financial vs. Condor Energies |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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