Correlation Between Backstageplay and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Backstageplay and Manulife Financial 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 Backstageplay and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Backstageplay and Manulife Financial Corp, you can compare the effects of market volatilities on Backstageplay and Manulife Financial 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 Backstageplay with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Backstageplay and Manulife Financial.
Diversification Opportunities for Backstageplay and Manulife Financial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Backstageplay and Manulife is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Backstageplay and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Backstageplay 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 Backstageplay are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Backstageplay i.e., Backstageplay and Manulife Financial go up and down completely randomly.
Pair Corralation between Backstageplay and Manulife Financial
Given the investment horizon of 90 days Backstageplay is expected to under-perform the Manulife Financial. In addition to that, Backstageplay is 2.81 times more volatile than Manulife Financial Corp. It trades about -0.23 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.24 per unit of volatility. If you would invest 1,616 in Manulife Financial Corp on February 20, 2024 and sell it today you would earn a total of 284.00 from holding Manulife Financial Corp or generate 17.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Backstageplay vs. Manulife Financial Corp
Performance |
Timeline |
Backstageplay |
Manulife Financial Corp |
Backstageplay and Manulife Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Backstageplay and Manulife Financial
The main advantage of trading using opposite Backstageplay and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Backstageplay position performs unexpectedly, Manulife Financial 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 Financial will offset losses from the drop in Manulife Financial's long position.Backstageplay vs. Coho Collective Kitchens | Backstageplay vs. Profound Medical Corp | Backstageplay vs. Faction Investment Group | Backstageplay vs. Andean Precious Metals |
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Check out your portfolio center.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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