Correlation Between Manulife Finl and Energy Fuels

Can any of the company-specific risk be diversified away by investing in both Manulife Finl and Energy Fuels 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 Energy Fuels 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 Energy Fuels, you can compare the effects of market volatilities on Manulife Finl and Energy Fuels 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 Energy Fuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Finl and Energy Fuels.

Diversification Opportunities for Manulife Finl and Energy Fuels

-0.49

Correlation Coefficient

Manulife Finl  Energy Fuels

Very good diversification

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

Pair Corralation between Manulife Finl and Energy Fuels

Assuming the 90 days trading horizon Manulife Finl Srs is expected to generate 0.23 times more return on investment than Energy Fuels. However, Manulife Finl Srs is 4.34 times less risky than Energy Fuels. It trades about 0.08 of its potential returns per unit of risk. Energy Fuels is currently generating about -0.12 per unit of risk. If you would invest  1,962  in Manulife Finl Srs on December 30, 2024 and sell it today you would earn a total of  75.00  from holding Manulife Finl Srs or generate 3.82% return on investment over 90 days.

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

Manulife Finl Srs  vs.  Energy Fuels

Manulife Finl Srs

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Finl Srs are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Manulife Finl is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Energy Fuels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Manulife Finl and Energy Fuels

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

The idea behind Manulife Finl Srs and Energy Fuels 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.