Correlation Between IShares Core and Manulife Multifactor
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Manulife Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Manulife Multifactor Developed, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Manulife Multifactor.
Diversification Opportunities for IShares Core and Manulife Multifactor
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Manulife is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Manulife Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor 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 MSCI 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 has no effect on the direction of IShares Core i.e., IShares Core and Manulife Multifactor go up and down completely randomly.
Pair Corralation between IShares Core and Manulife Multifactor
Assuming the 90 days trading horizon IShares Core is expected to generate 1.56 times less return on investment than Manulife Multifactor. But when comparing it to its historical volatility, iShares Core MSCI is 1.12 times less risky than Manulife Multifactor. It trades about 0.12 of its potential returns per unit of risk. Manulife Multifactor Developed is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,682 in Manulife Multifactor Developed on October 25, 2024 and sell it today you would earn a total of 1,200 from holding Manulife Multifactor Developed or generate 44.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Manulife Multifactor Developed
Performance |
| Timeline |
| iShares Core MSCI |
| Manulife Multifactor |
IShares Core and Manulife Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Manulife Multifactor
The main advantage of trading using opposite IShares Core and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core SPTSX | IShares Core vs. Vanguard Total Market | IShares Core vs. iShares Core SP |
| Manulife Multifactor vs. Manulife Multifactor Large | Manulife Multifactor vs. Manulife Multifactor Mid | Manulife Multifactor vs. Manulife Multifactor Canadian | Manulife Multifactor vs. Mackenzie Core Plus |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |