Correlation Between Manulife Financial and Manulife Financial

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

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

Diversification Opportunities for Manulife Financial and Manulife Financial

0.54

Correlation Coefficient

Manulife Financial  Manulife Financial

Very weak diversification

The 3 months correlation between Manulife and Manulife is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp 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 are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and Manulife Financial go up and down completely randomly.

Pair Corralation between Manulife Financial and Manulife Financial

Assuming the 90 days horizon Manulife Financial is expected to under-perform the Manulife Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Manulife Financial is 1.67 times less risky than Manulife Financial. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Manulife Financial Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,213  in Manulife Financial Corp on November 28, 2024 and sell it today you would lose (141.00) from holding Manulife Financial Corp or give up 4.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Manulife Financial  vs.  Manulife Financial Corp

Manulife Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Manulife Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Manulife Financial and Manulife Financial

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

The idea behind Manulife Financial and Manulife Financial Corp 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.