Correlation Between Manulife Multifactor and Evolve Cyber

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

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

Diversification Opportunities for Manulife Multifactor and Evolve Cyber

0.87

Correlation Coefficient

Manulife Multifactor  Evolve Cyber

Very poor diversification

The 3 months correlation between Manulife and Evolve is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Canadian and Evolve Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Cyber Security and Manulife Multifactor 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 Manulife Multifactor Canadian are associated (or correlated) with Evolve Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Cyber Security has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Evolve Cyber go up and down completely randomly.

Pair Corralation between Manulife Multifactor and Evolve Cyber

Assuming the 90 days trading horizon Manulife Multifactor Canadian is expected to under-perform the Evolve Cyber. But the etf apears to be less risky and, when comparing its historical volatility, Manulife Multifactor Canadian is 2.48 times less risky than Evolve Cyber. The etf trades about -0.18 of its potential returns per unit of risk. The Evolve Cyber Security is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  6,252  in Evolve Cyber Security on September 26, 2024 and sell it today you would lose (47.00) from holding Evolve Cyber Security or give up 0.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

Manulife Multifactor Canadian  vs.  Evolve Cyber Security

Manulife Multifactor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Canadian are ranked lower than 8 (%) 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.

Evolve Cyber Security

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Cyber Security are ranked lower than 8 (%) 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.

Pair Trading with Manulife Multifactor and Evolve Cyber

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

The idea behind Manulife Multifactor Canadian and Evolve Cyber Security 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.

Check out your portfolio center.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..