Correlation Between Tesla and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc CDR and Manulife Financial Corp, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Manulife Financial.
Diversification Opportunities for Tesla and Manulife Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesla and Manulife is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR 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 Tesla 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 Tesla Inc CDR 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 Tesla i.e., Tesla and Manulife Financial go up and down completely randomly.
Pair Corralation between Tesla and Manulife Financial
Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 8.65 times more return on investment than Manulife Financial. However, Tesla is 8.65 times more volatile than Manulife Financial Corp. It trades about 0.33 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about -0.03 per unit of risk. If you would invest 2,277 in Tesla Inc CDR on September 1, 2024 and sell it today you would earn a total of 863.00 from holding Tesla Inc CDR or generate 37.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc CDR vs. Manulife Financial Corp
Performance |
| Timeline |
| Tesla Inc CDR |
| Manulife Financial Corp |
Tesla and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Manulife Financial
The main advantage of trading using opposite Tesla and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. NovaGold Resources | Tesla vs. HPQ Silicon Resources | Tesla vs. Eastwood Bio Medical Canada | Tesla vs. Diamond Fields Resources |
| Manulife Financial vs. Manulife Financial Corp | Manulife Financial vs. Manulife Fin Non | Manulife Financial vs. Great West Lifeco | Manulife Financial vs. Great West Lifeco |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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