Correlation Between Edgepoint Global and Manulife Dividend

Can any of the company-specific risk be diversified away by investing in both Edgepoint Global and Manulife Dividend 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 Edgepoint Global and Manulife Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edgepoint Global Portfolio and Manulife Dividend Income, you can compare the effects of market volatilities on Edgepoint Global and Manulife Dividend 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 Edgepoint Global with a short position of Manulife Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgepoint Global and Manulife Dividend.

Diversification Opportunities for Edgepoint Global and Manulife Dividend

0.83

Correlation Coefficient

Edgepoint Global  Manulife Dividend

Very poor diversification

The 3 months correlation between Edgepoint and Manulife is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Global Portfolio and Manulife Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Dividend Income and Edgepoint Global 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 Edgepoint Global Portfolio are associated (or correlated) with Manulife Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Dividend Income has no effect on the direction of Edgepoint Global i.e., Edgepoint Global and Manulife Dividend go up and down completely randomly.

Pair Corralation between Edgepoint Global and Manulife Dividend

Assuming the 90 days trading horizon Edgepoint Global Portfolio is expected to generate 0.91 times more return on investment than Manulife Dividend. However, Edgepoint Global Portfolio is 1.09 times less risky than Manulife Dividend. It trades about 0.04 of its potential returns per unit of risk. Manulife Dividend Income is currently generating about 0.01 per unit of risk. If you would invest  3,305  in Edgepoint Global Portfolio on October 11, 2024 and sell it today you would earn a total of  386.00  from holding Edgepoint Global Portfolio or generate 11.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Edgepoint Global Portfolio  vs.  Manulife Dividend Income

Edgepoint Global Por

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Edgepoint Global Portfolio has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong forward indicators, Edgepoint Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Manulife Dividend Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manulife Dividend Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Edgepoint Global and Manulife Dividend

The main advantage of trading using opposite Edgepoint Global and Manulife Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgepoint Global position performs unexpectedly, Manulife Dividend 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 Dividend will offset losses from the drop in Manulife Dividend's long position.

The idea behind Edgepoint Global Portfolio and Manulife Dividend Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.