Correlation Between IShares SPTSX and Manulife Smart
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX 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 SPTSX 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 SPTSX Capped and Manulife Smart Dividend, you can compare the effects of market volatilities on IShares SPTSX 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 SPTSX with a short position of Manulife Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Manulife Smart.
Diversification Opportunities for IShares SPTSX and Manulife Smart
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Manulife is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped 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 IShares SPTSX 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 SPTSX Capped 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 IShares SPTSX i.e., IShares SPTSX and Manulife Smart go up and down completely randomly.
Pair Corralation between IShares SPTSX and Manulife Smart
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 1.16 times more return on investment than Manulife Smart. However, IShares SPTSX is 1.16 times more volatile than Manulife Smart Dividend. It trades about 0.09 of its potential returns per unit of risk. Manulife Smart Dividend is currently generating about 0.06 per unit of risk. If you would invest 4,410 in iShares SPTSX Capped on November 19, 2024 and sell it today you would earn a total of 1,644 from holding iShares SPTSX Capped or generate 37.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Manulife Smart Dividend
Performance |
| Timeline |
| iShares SPTSX Capped |
| Manulife Smart Dividend |
IShares SPTSX and Manulife Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Manulife Smart
The main advantage of trading using opposite IShares SPTSX and Manulife Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX 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 SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global | IShares SPTSX vs. iShares SPTSX Capped |
| Manulife Smart vs. Manulife Multifactor Mid | Manulife Smart vs. Manulife Smart International | Manulife Smart vs. Manulife Smart Short Term | Manulife Smart vs. Manulife Smart Corporate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |