Correlation Between IShares SP and Manulife Multifactor
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP Mid Cap and Manulife Multifactor Mid, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Manulife Multifactor.
Diversification Opportunities for IShares SP and Manulife Multifactor
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Manulife is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Mid Cap and Manulife Multifactor Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor Mid and IShares SP 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 SP Mid Cap 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 Mid has no effect on the direction of IShares SP i.e., IShares SP and Manulife Multifactor go up and down completely randomly.
Pair Corralation between IShares SP and Manulife Multifactor
Assuming the 90 days trading horizon IShares SP is expected to generate 1.03 times less return on investment than Manulife Multifactor. In addition to that, IShares SP is 1.09 times more volatile than Manulife Multifactor Mid. It trades about 0.08 of its total potential returns per unit of risk. Manulife Multifactor Mid is currently generating about 0.09 per unit of volatility. If you would invest 4,443 in Manulife Multifactor Mid on October 25, 2024 and sell it today you would earn a total of 245.00 from holding Manulife Multifactor Mid or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP Mid Cap vs. Manulife Multifactor Mid
Performance |
| Timeline |
| iShares SP Mid |
| Manulife Multifactor Mid |
IShares SP and Manulife Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Manulife Multifactor
The main advantage of trading using opposite IShares SP and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP vs. iShares Small Cap | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares Core SP | IShares SP vs. iShares MSCI Europe |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |