Correlation Between Nano One and Manulife Fin

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

By analyzing existing cross correlation between Nano One Materials and Manulife Fin Non, you can compare the effects of market volatilities on Nano One and Manulife Fin 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 Nano One with a short position of Manulife Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano One and Manulife Fin.

Diversification Opportunities for Nano One and Manulife Fin

0.8

Correlation Coefficient

Nano One  Manulife Fin

Very poor diversification

The 3 months correlation between Nano and Manulife is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials and Manulife Fin Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Fin Non and Nano One 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 Nano One Materials are associated (or correlated) with Manulife Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Fin Non has no effect on the direction of Nano One i.e., Nano One and Manulife Fin go up and down completely randomly.

Pair Corralation between Nano One and Manulife Fin

Assuming the 90 days trading horizon Nano One Materials is expected to under-perform the Manulife Fin. In addition to that, Nano One is 9.66 times more volatile than Manulife Fin Non. It trades about -0.09 of its total potential returns per unit of risk. Manulife Fin Non is currently generating about 0.02 per unit of volatility. If you would invest  2,466  in Manulife Fin Non on December 22, 2024 and sell it today you would earn a total of  11.00  from holding Manulife Fin Non or generate 0.45% return on investment over 90 days.

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

Nano One Materials  vs.  Manulife Fin Non

Nano One Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano One Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Manulife Fin Non

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Fin Non are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Manulife Fin is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nano One and Manulife Fin

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

The idea behind Nano One Materials and Manulife Fin Non 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.