Correlation Between Manulife Multifactor and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both Manulife Multifactor and Fidelity Canadian 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 Fidelity Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Multifactor Developed and Fidelity Canadian High, you can compare the effects of market volatilities on Manulife Multifactor and Fidelity Canadian 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 Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Multifactor and Fidelity Canadian.
Diversification Opportunities for Manulife Multifactor and Fidelity Canadian
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Developed and Fidelity Canadian High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian High 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 Developed are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian High has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Fidelity Canadian go up and down completely randomly.
Pair Corralation between Manulife Multifactor and Fidelity Canadian
Assuming the 90 days trading horizon Manulife Multifactor Developed is expected to generate 1.56 times more return on investment than Fidelity Canadian. However, Manulife Multifactor is 1.56 times more volatile than Fidelity Canadian High. It trades about 0.16 of its potential returns per unit of risk. Fidelity Canadian High is currently generating about 0.2 per unit of risk. If you would invest 3,612 in Manulife Multifactor Developed on September 12, 2024 and sell it today you would earn a total of 233.00 from holding Manulife Multifactor Developed or generate 6.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Manulife Multifactor Developed vs. Fidelity Canadian High
Performance |
Timeline |
Manulife Multifactor |
Fidelity Canadian High |
Manulife Multifactor and Fidelity Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Manulife Multifactor and Fidelity Canadian
The main advantage of trading using opposite Manulife Multifactor and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Multifactor position performs unexpectedly, Fidelity Canadian 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 Fidelity Canadian will offset losses from the drop in Fidelity Canadian's long position.Manulife Multifactor vs. iShares Core MSCI | Manulife Multifactor vs. BMO MSCI EAFE | Manulife Multifactor vs. Vanguard FTSE Developed | Manulife Multifactor vs. iShares MSCI EAFE |
Fidelity Canadian vs. iShares SPTSX Composite | Fidelity Canadian vs. iShares Canadian Select | Fidelity Canadian vs. Vanguard FTSE Canadian | Fidelity Canadian vs. BMO Canadian High |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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