Correlation Between Solar Alliance and Manulife Dividend

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

By analyzing existing cross correlation between Solar Alliance Energy and Manulife Dividend Income, you can compare the effects of market volatilities on Solar Alliance and Manulife Dividend 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 Solar Alliance with a short position of Manulife Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and Manulife Dividend.

Diversification Opportunities for Solar Alliance and Manulife Dividend

0.15

Correlation Coefficient

Solar Alliance  Manulife Dividend

Average diversification

The 3 months correlation between Solar and Manulife is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and Manulife Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Dividend Income and Solar Alliance 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 Solar Alliance Energy are associated (or correlated) with Manulife Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Dividend Income has no effect on the direction of Solar Alliance i.e., Solar Alliance and Manulife Dividend go up and down completely randomly.

Pair Corralation between Solar Alliance and Manulife Dividend

Assuming the 90 days trading horizon Solar Alliance Energy is expected to under-perform the Manulife Dividend. In addition to that, Solar Alliance is 8.29 times more volatile than Manulife Dividend Income. It trades about -0.04 of its total potential returns per unit of risk. Manulife Dividend Income is currently generating about -0.09 per unit of volatility. If you would invest  1,642  in Manulife Dividend Income on October 25, 2024 and sell it today you would lose (136.00) from holding Manulife Dividend Income or give up 8.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Solar Alliance Energy  vs.  Manulife Dividend Income

Solar Alliance Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solar Alliance Energy 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 essential indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Manulife Dividend Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manulife Dividend Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Solar Alliance and Manulife Dividend

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

The idea behind Solar Alliance Energy and Manulife Dividend Income 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.