Correlation Between Manning Napier and Europac Gold

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

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

Diversification Opportunities for Manning Napier and Europac Gold

0.49

Correlation Coefficient

Manning Napier  Europac Gold

Very weak diversification

The 3 months correlation between Manning and Europac is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Manning Napier Core and Europac Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac Gold and Manning Napier 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 Manning Napier Core are associated (or correlated) with Europac Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac Gold has no effect on the direction of Manning Napier i.e., Manning Napier and Europac Gold go up and down completely randomly.

Pair Corralation between Manning Napier and Europac Gold

Assuming the 90 days horizon Manning Napier is expected to generate 22.08 times less return on investment than Europac Gold. But when comparing it to its historical volatility, Manning Napier Core is 4.65 times less risky than Europac Gold. It trades about 0.04 of its potential returns per unit of risk. Europac Gold Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  919.00  in Europac Gold Fund on October 20, 2024 and sell it today you would earn a total of  46.00  from holding Europac Gold Fund or generate 5.01% return on investment over 90 days.

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

Manning Napier Core  vs.  Europac Gold Fund

Manning Napier Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manning Napier Core 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.

Europac Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europac Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Manning Napier and Europac Gold

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

The idea behind Manning Napier Core and Europac Gold Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.