Correlation Between Tech Leaders and Manulife Smart

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

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

Diversification Opportunities for Tech Leaders and Manulife Smart

-0.83

Correlation Coefficient

Tech Leaders  Manulife Smart

Pay attention - limited upside

The 3 months correlation between Tech and Manulife is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tech Leaders Income and Manulife Smart International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Smart Inter and Tech Leaders 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 Tech Leaders Income are associated (or correlated) with Manulife Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Smart Inter has no effect on the direction of Tech Leaders i.e., Tech Leaders and Manulife Smart go up and down completely randomly.

Pair Corralation between Tech Leaders and Manulife Smart

Assuming the 90 days trading horizon Tech Leaders Income is expected to under-perform the Manulife Smart. In addition to that, Tech Leaders is 2.31 times more volatile than Manulife Smart International. It trades about -0.11 of its total potential returns per unit of risk. Manulife Smart International is currently generating about 0.17 per unit of volatility. If you would invest  1,231  in Manulife Smart International on December 31, 2024 and sell it today you would earn a total of  85.00  from holding Manulife Smart International or generate 6.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Tech Leaders Income  vs.  Manulife Smart International

Tech Leaders Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tech Leaders Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Manulife Smart Inter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Smart International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Manulife Smart may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Tech Leaders and Manulife Smart

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

The idea behind Tech Leaders Income and Manulife Smart International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..