Correlation Between TRON and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both TRON 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 TRON and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRON and Manulife Financial Corp, you can compare the effects of market volatilities on TRON 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 TRON with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Manulife Financial.
Diversification Opportunities for TRON and Manulife Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRON and Manulife is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding TRON 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 TRON 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 TRON 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 TRON i.e., TRON and Manulife Financial go up and down completely randomly.
Pair Corralation between TRON and Manulife Financial
Assuming the 90 days trading horizon TRON is expected to under-perform the Manulife Financial. In addition to that, TRON is 4.68 times more volatile than Manulife Financial Corp. It trades about -0.15 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.1 per unit of volatility. If you would invest 1,702 in Manulife Financial Corp on October 11, 2024 and sell it today you would earn a total of 28.00 from holding Manulife Financial Corp or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
TRON vs. Manulife Financial Corp
Performance |
| Timeline |
| TRON |
| Manulife Financial Corp |
TRON and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and Manulife Financial
The main advantage of trading using opposite TRON and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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.The idea behind TRON and Manulife Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Manulife Financial vs. Ramp Metals | Manulife Financial vs. AKITA Drilling | Manulife Financial vs. Dream Office Real | Manulife Financial vs. Mako 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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