Correlation Between Manulife Finl and ALX Uranium

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

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

Diversification Opportunities for Manulife Finl and ALX Uranium

-0.65

Correlation Coefficient

Manulife Finl  ALX Uranium

Excellent diversification

The 3 months correlation between Manulife and ALX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Finl Srs and ALX Uranium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALX Uranium Corp and Manulife Finl 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 Finl Srs are associated (or correlated) with ALX Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALX Uranium Corp has no effect on the direction of Manulife Finl i.e., Manulife Finl and ALX Uranium go up and down completely randomly.

Pair Corralation between Manulife Finl and ALX Uranium

Assuming the 90 days trading horizon Manulife Finl Srs is expected to under-perform the ALX Uranium. But the preferred stock apears to be less risky and, when comparing its historical volatility, Manulife Finl Srs is 21.14 times less risky than ALX Uranium. The preferred stock trades about -0.03 of its potential returns per unit of risk. The ALX Uranium Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2.00  in ALX Uranium Corp on September 13, 2024 and sell it today you would earn a total of  1.00  from holding ALX Uranium Corp or generate 50.0% return on investment over 90 days.

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

Manulife Finl Srs  vs.  ALX Uranium Corp

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.

ALX Uranium Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALX Uranium Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ALX Uranium showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manulife Finl and ALX Uranium

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

The idea behind Manulife Finl Srs and ALX Uranium Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.