Correlation Between Manulife Financial and FG Annuities

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

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

Diversification Opportunities for Manulife Financial and FG Annuities

-0.34

Correlation Coefficient

Manulife Financial  FG Annuities

Very good diversification

The 3 months correlation between Manulife and FG Annuities is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life and Manulife Financial 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 Financial Corp are associated (or correlated) with FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of Manulife Financial i.e., Manulife Financial and FG Annuities go up and down completely randomly.

Pair Corralation between Manulife Financial and FG Annuities

Considering the 90-day investment horizon Manulife Financial Corp is expected to generate 0.58 times more return on investment than FG Annuities. However, Manulife Financial Corp is 1.72 times less risky than FG Annuities. It trades about 0.02 of its potential returns per unit of risk. FG Annuities Life is currently generating about -0.06 per unit of risk. If you would invest  3,031  in Manulife Financial Corp on December 30, 2024 and sell it today you would earn a total of  45.00  from holding Manulife Financial Corp or generate 1.48% return on investment over 90 days.

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

Manulife Financial Corp  vs.  FG Annuities Life

Manulife Financial Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Manulife Financial is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FG Annuities Life

Risk-Adjusted Performance

Very Weak

Over the last 90 days FG Annuities Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Manulife Financial and FG Annuities

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

The idea behind Manulife Financial Corp and FG Annuities Life 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.