Correlation Between Manulife Global and RBC Portefeuille

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

By analyzing existing cross correlation between Manulife Global Equity and RBC Portefeuille de, you can compare the effects of market volatilities on Manulife Global and RBC Portefeuille 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 Global with a short position of RBC Portefeuille. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Global and RBC Portefeuille.

Diversification Opportunities for Manulife Global and RBC Portefeuille

0.52

Correlation Coefficient

Manulife Global  RBC Portefeuille

Very weak diversification

The 3 months correlation between Manulife and RBC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Global Equity and RBC Portefeuille de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Portefeuille and Manulife Global 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 Global Equity are associated (or correlated) with RBC Portefeuille. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Portefeuille has no effect on the direction of Manulife Global i.e., Manulife Global and RBC Portefeuille go up and down completely randomly.

Pair Corralation between Manulife Global and RBC Portefeuille

Assuming the 90 days trading horizon Manulife Global is expected to generate 1.1 times less return on investment than RBC Portefeuille. In addition to that, Manulife Global is 1.09 times more volatile than RBC Portefeuille de. It trades about 0.07 of its total potential returns per unit of risk. RBC Portefeuille de is currently generating about 0.08 per unit of volatility. If you would invest  3,954  in RBC Portefeuille de on December 2, 2024 and sell it today you would earn a total of  64.00  from holding RBC Portefeuille de or generate 1.62% return on investment over 90 days.

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

Manulife Global Equity  vs.  RBC Portefeuille de

Manulife Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Global Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Manulife Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

RBC Portefeuille

Risk-Adjusted Performance

Very Weak

Over the last 90 days RBC Portefeuille de has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, RBC Portefeuille is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Manulife Global and RBC Portefeuille

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

The idea behind Manulife Global Equity and RBC Portefeuille de 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.