Correlation Between William Blair and Manning Napier

Can any of the company-specific risk be diversified away by investing in both William Blair and Manning Napier 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 William Blair and Manning Napier into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between William Blair Small and Manning Napier Overseas, you can compare the effects of market volatilities on William Blair and Manning Napier 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 William Blair with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Manning Napier.

Diversification Opportunities for William Blair and Manning Napier

-0.52

Correlation Coefficient

William Blair  Manning Napier

Excellent diversification

The 3 months correlation between William and Manning is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Small and Manning Napier Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Overseas and William Blair 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 William Blair Small are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Overseas has no effect on the direction of William Blair i.e., William Blair and Manning Napier go up and down completely randomly.

Pair Corralation between William Blair and Manning Napier

Assuming the 90 days horizon William Blair is expected to generate 2.19 times less return on investment than Manning Napier. But when comparing it to its historical volatility, William Blair Small is 1.0 times less risky than Manning Napier. It trades about 0.05 of its potential returns per unit of risk. Manning Napier Overseas is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,260  in Manning Napier Overseas on September 16, 2024 and sell it today you would earn a total of  54.00  from holding Manning Napier Overseas or generate 1.66% return on investment over 90 days.

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

William Blair Small  vs.  Manning Napier Overseas

William Blair Small

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, William Blair is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Manning Napier Overseas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manning Napier Overseas has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Manning Napier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with William Blair and Manning Napier

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

The idea behind William Blair Small and Manning Napier Overseas 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.