Correlation Between Vanguard FTSE and Manulife Smart
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Manulife Smart 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 Vanguard FTSE and Manulife Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and Manulife Smart Dividend, you can compare the effects of market volatilities on Vanguard FTSE and Manulife Smart 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 Vanguard FTSE with a short position of Manulife Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Manulife Smart.
Diversification Opportunities for Vanguard FTSE and Manulife Smart
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Manulife is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Manulife Smart Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Smart Dividend and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with Manulife Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Smart Dividend has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Manulife Smart go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Manulife Smart
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to generate 0.55 times more return on investment than Manulife Smart. However, Vanguard FTSE Developed is 1.83 times less risky than Manulife Smart. It trades about 0.47 of its potential returns per unit of risk. Manulife Smart Dividend is currently generating about -0.08 per unit of risk. If you would invest 4,329 in Vanguard FTSE Developed on September 13, 2024 and sell it today you would earn a total of 174.00 from holding Vanguard FTSE Developed or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. Manulife Smart Dividend
Performance |
| Timeline |
| Vanguard FTSE Developed |
| Manulife Smart Dividend |
Vanguard FTSE and Manulife Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Manulife Smart
The main advantage of trading using opposite Vanguard FTSE and Manulife Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Manulife Smart 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 Smart will offset losses from the drop in Manulife Smart's long position.| Vanguard FTSE vs. iShares Core MSCI | Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. iShares MSCI EAFE | Vanguard FTSE vs. BMO MSCI EAFE |
| Manulife Smart vs. Vanguard Dividend Appreciation | Manulife Smart vs. Vanguard Total Market | Manulife Smart vs. Vanguard FTSE Developed | Manulife Smart vs. Vanguard FTSE Developed |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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