Correlation Between CarsalesCom and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both CarsalesCom 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 CarsalesCom and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Manulife Financial, you can compare the effects of market volatilities on CarsalesCom 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 CarsalesCom with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and Manulife Financial.
Diversification Opportunities for CarsalesCom and Manulife Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CarsalesCom and Manulife is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial and CarsalesCom 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 CarsalesCom 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 has no effect on the direction of CarsalesCom i.e., CarsalesCom and Manulife Financial go up and down completely randomly.
Pair Corralation between CarsalesCom and Manulife Financial
Assuming the 90 days horizon CarsalesCom is expected to generate 1.84 times less return on investment than Manulife Financial. But when comparing it to its historical volatility, CarsalesCom is 1.05 times less risky than Manulife Financial. It trades about 0.07 of its potential returns per unit of risk. Manulife Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,784 in Manulife Financial on September 14, 2024 and sell it today you would earn a total of 1,185 from holding Manulife Financial or generate 66.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Manulife Financial
Performance |
| Timeline |
| CarsalesCom |
| Manulife Financial |
CarsalesCom and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and Manulife Financial
The main advantage of trading using opposite CarsalesCom and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom 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.| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
| Manulife Financial vs. Take Two Interactive Software | Manulife Financial vs. Constellation Software | Manulife Financial vs. VITEC SOFTWARE GROUP | Manulife Financial vs. UPDATE SOFTWARE |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |