Correlation Between Evolve Cyber and Manulife Multifactor

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

By analyzing existing cross correlation between Evolve Cyber Security and Manulife Multifactor Mid, you can compare the effects of market volatilities on Evolve Cyber 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 Evolve Cyber with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Cyber and Manulife Multifactor.

Diversification Opportunities for Evolve Cyber and Manulife Multifactor

0.81

Correlation Coefficient

Evolve Cyber  Manulife Multifactor

Very poor diversification

The 3 months correlation between Evolve and Manulife is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Cyber Security 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 Evolve Cyber 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 Evolve Cyber Security 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 Evolve Cyber i.e., Evolve Cyber and Manulife Multifactor go up and down completely randomly.

Pair Corralation between Evolve Cyber and Manulife Multifactor

Assuming the 90 days trading horizon Evolve Cyber Security is expected to generate 1.66 times more return on investment than Manulife Multifactor. However, Evolve Cyber is 1.66 times more volatile than Manulife Multifactor Mid. It trades about -0.02 of its potential returns per unit of risk. Manulife Multifactor Mid is currently generating about -0.34 per unit of risk. If you would invest  6,238  in Evolve Cyber Security on September 27, 2024 and sell it today you would lose (49.00) from holding Evolve Cyber Security or give up 0.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Evolve Cyber Security  vs.  Manulife Multifactor Mid

Evolve Cyber Security

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Cyber Security are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Evolve Cyber may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Manulife Multifactor Mid

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Mid are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Manulife Multifactor is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Evolve Cyber and Manulife Multifactor

The main advantage of trading using opposite Evolve Cyber and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolve Cyber 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.

The idea behind Evolve Cyber Security and Manulife Multifactor Mid 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 Global Correlations module to find global opportunities by holding instruments from different markets.