Correlation Between CI MidCap and Manulife Multifactor
Can any of the company-specific risk be diversified away by investing in both CI MidCap and Manulife Multifactor 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 CI MidCap and Manulife Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI MidCap Dividend and Manulife Multifactor Mid, you can compare the effects of market volatilities on CI MidCap and Manulife Multifactor 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 CI MidCap with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI MidCap and Manulife Multifactor.
Diversification Opportunities for CI MidCap and Manulife Multifactor
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UMI and Manulife is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CI MidCap Dividend and Manulife Multifactor Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor Mid and CI MidCap 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 CI MidCap Dividend are associated (or correlated) with Manulife Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Multifactor Mid has no effect on the direction of CI MidCap i.e., CI MidCap and Manulife Multifactor go up and down completely randomly.
Pair Corralation between CI MidCap and Manulife Multifactor
Assuming the 90 days trading horizon CI MidCap is expected to generate 1.29 times less return on investment than Manulife Multifactor. In addition to that, CI MidCap is 1.15 times more volatile than Manulife Multifactor Mid. It trades about 0.06 of its total potential returns per unit of risk. Manulife Multifactor Mid is currently generating about 0.09 per unit of volatility. If you would invest 4,443 in Manulife Multifactor Mid on October 25, 2024 and sell it today you would earn a total of 245.00 from holding Manulife Multifactor Mid or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
CI MidCap Dividend vs. Manulife Multifactor Mid
Performance |
| Timeline |
| CI MidCap Dividend |
| Manulife Multifactor Mid |
CI MidCap and Manulife Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI MidCap and Manulife Multifactor
The main advantage of trading using opposite CI MidCap and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI MidCap position performs unexpectedly, Manulife Multifactor 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 Multifactor will offset losses from the drop in Manulife Multifactor's long position.| CI MidCap vs. CI ONE Global | CI MidCap vs. CI Yield Enhanced | CI MidCap vs. BMO Aggregate Bond | CI MidCap vs. iShares Canadian HYBrid |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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