Correlation Between Mackenzie Core and Manulife Multifactor

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

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

Diversification Opportunities for Mackenzie Core and Manulife Multifactor

-0.44

Correlation Coefficient

Mackenzie Core  Manulife Multifactor

Very good diversification

The 3 months correlation between Mackenzie and Manulife is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mackenzie Core Plus and Manulife Multifactor Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor and Mackenzie Core 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 Mackenzie Core Plus are associated (or correlated) with Manulife Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Multifactor has no effect on the direction of Mackenzie Core i.e., Mackenzie Core and Manulife Multifactor go up and down completely randomly.

Pair Corralation between Mackenzie Core and Manulife Multifactor

Assuming the 90 days trading horizon Mackenzie Core is expected to generate 55.69 times less return on investment than Manulife Multifactor. But when comparing it to its historical volatility, Mackenzie Core Plus is 1.78 times less risky than Manulife Multifactor. It trades about 0.01 of its potential returns per unit of risk. Manulife Multifactor Large is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  5,000  in Manulife Multifactor Large on September 5, 2024 and sell it today you would earn a total of  478.00  from holding Manulife Multifactor Large or generate 9.56% return on investment over 90 days.

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

Mackenzie Core Plus  vs.  Manulife Multifactor Large

Mackenzie Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mackenzie Core Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Mackenzie Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Manulife Multifactor

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Large are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Manulife Multifactor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mackenzie Core and Manulife Multifactor

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

The idea behind Mackenzie Core Plus and Manulife Multifactor Large 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..