Correlation Between Manulife Multifactor and Evolve Global

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

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

Diversification Opportunities for Manulife Multifactor and Evolve Global

-0.73

Correlation Coefficient

Manulife Multifactor  Evolve Global

Pay attention - limited upside

The 3 months correlation between Manulife and Evolve is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Mid and Evolve Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Global Healthcare 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 Mid are associated (or correlated) with Evolve Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Global Healthcare has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Evolve Global go up and down completely randomly.

Pair Corralation between Manulife Multifactor and Evolve Global

Assuming the 90 days trading horizon Manulife Multifactor Mid is expected to generate 1.29 times more return on investment than Evolve Global. However, Manulife Multifactor is 1.29 times more volatile than Evolve Global Healthcare. It trades about -0.01 of its potential returns per unit of risk. Evolve Global Healthcare is currently generating about -0.36 per unit of risk. If you would invest  4,471  in Manulife Multifactor Mid on September 23, 2024 and sell it today you would lose (33.00) from holding Manulife Multifactor Mid or give up 0.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

Manulife Multifactor Mid  vs.  Evolve Global Healthcare

Manulife Multifactor Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Evolve Global Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolve Global Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Manulife Multifactor and Evolve Global

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

The idea behind Manulife Multifactor Mid and Evolve Global Healthcare 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.