Correlation Between Westshore Terminals and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals 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 Westshore Terminals and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and Manulife Financial Corp, you can compare the effects of market volatilities on Westshore Terminals 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 Westshore Terminals with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and Manulife Financial.
Diversification Opportunities for Westshore Terminals and Manulife Financial
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westshore and Manulife is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment 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 Westshore Terminals 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 Westshore Terminals Investment 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 Westshore Terminals i.e., Westshore Terminals and Manulife Financial go up and down completely randomly.
Pair Corralation between Westshore Terminals and Manulife Financial
Assuming the 90 days trading horizon Westshore Terminals Investment is expected to under-perform the Manulife Financial. But the stock apears to be less risky and, when comparing its historical volatility, Westshore Terminals Investment is 1.18 times less risky than Manulife Financial. The stock trades about -0.11 of its potential returns per unit of risk. The Manulife Financial Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,665 in Manulife Financial Corp on October 11, 2024 and sell it today you would earn a total of 93.00 from holding Manulife Financial Corp or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Westshore Terminals Investment vs. Manulife Financial Corp
Performance |
| Timeline |
| Westshore Terminals |
| Manulife Financial Corp |
Westshore Terminals and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westshore Terminals and Manulife Financial
The main advantage of trading using opposite Westshore Terminals and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals 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.| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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