Correlation Between AGFiQ Market and Manulife Multifactor

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

By analyzing existing cross correlation between AGFiQ Market Neutral and Manulife Multifactor Mid, you can compare the effects of market volatilities on AGFiQ Market and Manulife Multifactor 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 AGFiQ Market with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFiQ Market and Manulife Multifactor.

Diversification Opportunities for AGFiQ Market and Manulife Multifactor

-0.82

Correlation Coefficient

AGFiQ Market  Manulife Multifactor

Pay attention - limited upside

The 3 months correlation between AGFiQ and Manulife is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AGFiQ Market Neutral and Manulife Multifactor Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor Mid and AGFiQ Market 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 AGFiQ Market Neutral are associated (or correlated) with Manulife Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Multifactor Mid has no effect on the direction of AGFiQ Market i.e., AGFiQ Market and Manulife Multifactor go up and down completely randomly.

Pair Corralation between AGFiQ Market and Manulife Multifactor

Assuming the 90 days trading horizon AGFiQ Market is expected to generate 9.57 times less return on investment than Manulife Multifactor. In addition to that, AGFiQ Market is 1.19 times more volatile than Manulife Multifactor Mid. It trades about 0.01 of its total potential returns per unit of risk. Manulife Multifactor Mid is currently generating about 0.09 per unit of volatility. If you would invest  3,610  in Manulife Multifactor Mid on September 23, 2024 and sell it today you would earn a total of  828.00  from holding Manulife Multifactor Mid or generate 22.94% return on investment over 90 days.

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

AGFiQ Market Neutral  vs.  Manulife Multifactor Mid

AGFiQ Market Neutral

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with AGFiQ Market and Manulife Multifactor

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

The idea behind AGFiQ Market Neutral and Manulife Multifactor Mid 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.