Correlation Between Primaris Retail and Manulife Fin

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

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

Diversification Opportunities for Primaris Retail and Manulife Fin

-0.26

Correlation Coefficient

Primaris Retail  Manulife Fin

Very good diversification

The 3 months correlation between Primaris and Manulife is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE 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 Primaris Retail 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 Primaris Retail RE 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 Primaris Retail i.e., Primaris Retail and Manulife Fin go up and down completely randomly.

Pair Corralation between Primaris Retail and Manulife Fin

Assuming the 90 days trading horizon Primaris Retail RE is expected to under-perform the Manulife Fin. In addition to that, Primaris Retail is 2.45 times more volatile than Manulife Fin Non. It trades about -0.02 of its total potential returns per unit of risk. Manulife Fin Non is currently generating about -0.01 per unit of volatility. If you would invest  2,475  in Manulife Fin Non on December 25, 2024 and sell it today you would lose (10.00) from holding Manulife Fin Non or give up 0.4% of portfolio value over 90 days.

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

Primaris Retail RE  vs.  Manulife Fin Non

Primaris Retail RE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Manulife Fin Non

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Fin Non has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Manulife Fin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Primaris Retail and Manulife Fin

The main advantage of trading using opposite Primaris Retail and Manulife Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail 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 Primaris Retail RE 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.