Correlation Between Gatos Silver and Manulife Finl

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

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

Diversification Opportunities for Gatos Silver and Manulife Finl

-0.13

Correlation Coefficient

Gatos Silver  Manulife Finl

Good diversification

The 3 months correlation between Gatos and Manulife is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs and Gatos Silver 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 Gatos Silver are associated (or correlated) with Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Gatos Silver i.e., Gatos Silver and Manulife Finl go up and down completely randomly.

Pair Corralation between Gatos Silver and Manulife Finl

Assuming the 90 days trading horizon Gatos Silver is expected to generate 6.36 times more return on investment than Manulife Finl. However, Gatos Silver is 6.36 times more volatile than Manulife Finl Srs. It trades about 0.07 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about -0.03 per unit of risk. If you would invest  2,097  in Gatos Silver on September 13, 2024 and sell it today you would earn a total of  297.00  from holding Gatos Silver or generate 14.16% return on investment over 90 days.

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

Gatos Silver  vs.  Manulife Finl Srs

Gatos Silver

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gatos Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Gatos Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Manulife Finl Srs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manulife Finl Srs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Manulife Finl is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gatos Silver and Manulife Finl

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

The idea behind Gatos Silver and Manulife Finl Srs 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.