Correlation Between Calian Technologies and Manulife Financial

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

By analyzing existing cross correlation between Calian Technologies and Manulife Financial Corp, you can compare the effects of market volatilities on Calian Technologies and Manulife Financial 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 Calian Technologies with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calian Technologies and Manulife Financial.

Diversification Opportunities for Calian Technologies and Manulife Financial

0.24

Correlation Coefficient

Calian Technologies  Manulife Financial

Modest diversification

The 3 months correlation between Calian and Manulife is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Calian Technologies 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 Calian Technologies are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Calian Technologies i.e., Calian Technologies and Manulife Financial go up and down completely randomly.

Pair Corralation between Calian Technologies and Manulife Financial

Assuming the 90 days trading horizon Calian Technologies is expected to generate 1.75 times less return on investment than Manulife Financial. In addition to that, Calian Technologies is 1.49 times more volatile than Manulife Financial Corp. It trades about 0.07 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.17 per unit of volatility. If you would invest  1,655  in Manulife Financial Corp on October 25, 2024 and sell it today you would earn a total of  185.00  from holding Manulife Financial Corp or generate 11.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Calian Technologies  vs.  Manulife Financial Corp

Calian Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calian Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Calian Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Manulife Financial Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, Manulife Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Calian Technologies and Manulife Financial

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

The idea behind Calian Technologies and Manulife Financial Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.