Correlation Between IShares Core and Manulife Smart
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Manulife Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Canadian and Manulife Smart Corporate, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Manulife Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Manulife Smart.
Diversification Opportunities for IShares Core and Manulife Smart
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Manulife is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Canadian and Manulife Smart Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Smart Corporate and IShares Core 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 iShares Core Canadian 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 Corporate has no effect on the direction of IShares Core i.e., IShares Core and Manulife Smart go up and down completely randomly.
Pair Corralation between IShares Core and Manulife Smart
Assuming the 90 days trading horizon IShares Core is expected to generate 1.18 times less return on investment than Manulife Smart. But when comparing it to its historical volatility, iShares Core Canadian is 1.19 times less risky than Manulife Smart. It trades about 0.12 of its potential returns per unit of risk. Manulife Smart Corporate is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Manulife Smart Corporate on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Manulife Smart Corporate or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Canadian vs. Manulife Smart Corporate
Performance |
| Timeline |
| iShares Core Canadian |
| Manulife Smart Corporate |
IShares Core and Manulife Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Manulife Smart
The main advantage of trading using opposite IShares Core and Manulife Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Canadian Government | IShares Core vs. iShares Canadian Short | IShares Core vs. iShares Core Canadian | IShares Core vs. iShares Canadian Real |
| Manulife Smart vs. Manulife Multifactor Mid | Manulife Smart vs. Manulife Smart International | Manulife Smart vs. Manulife Smart Short Term | Manulife Smart vs. Manulife Multifactor 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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