Correlation Between Alphabet and Manning Napier

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

By analyzing existing cross correlation between Alphabet Inc Class C and Manning Napier Callodine, you can compare the effects of market volatilities on Alphabet and Manning Napier 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 Alphabet with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Manning Napier.

Diversification Opportunities for Alphabet and Manning Napier

0.76

Correlation Coefficient

Alphabet  Manning Napier

Poor diversification

The 3 months correlation between Alphabet and Manning is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Manning Napier Callodine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Callodine and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Callodine has no effect on the direction of Alphabet i.e., Alphabet and Manning Napier go up and down completely randomly.

Pair Corralation between Alphabet and Manning Napier

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Manning Napier. In addition to that, Alphabet is 2.19 times more volatile than Manning Napier Callodine. It trades about -0.09 of its total potential returns per unit of risk. Manning Napier Callodine is currently generating about -0.04 per unit of volatility. If you would invest  1,333  in Manning Napier Callodine on December 27, 2024 and sell it today you would lose (28.00) from holding Manning Napier Callodine or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Alphabet Inc Class C  vs.  Manning Napier Callodine

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Manning Napier Callodine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manning Napier Callodine has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Manning Napier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alphabet and Manning Napier

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

The idea behind Alphabet Inc Class C and Manning Napier Callodine 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.