Correlation Between E Split and Manulife Multifactor

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Can any of the company-specific risk be diversified away by investing in both E Split 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 E Split and Manulife Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Split Corp and Manulife Multifactor Developed, you can compare the effects of market volatilities on E Split 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 E Split with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Manulife Multifactor.

Diversification Opportunities for E Split and Manulife Multifactor

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between ENS and Manulife is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Manulife Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor and E Split 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 E Split Corp 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 has no effect on the direction of E Split i.e., E Split and Manulife Multifactor go up and down completely randomly.

Pair Corralation between E Split and Manulife Multifactor

Assuming the 90 days trading horizon E Split Corp is expected to under-perform the Manulife Multifactor. In addition to that, E Split is 1.45 times more volatile than Manulife Multifactor Developed. It trades about -0.16 of its total potential returns per unit of risk. Manulife Multifactor Developed is currently generating about -0.16 per unit of volatility. If you would invest  3,890  in Manulife Multifactor Developed on March 20, 2024 and sell it today you would lose (84.00) from holding Manulife Multifactor Developed or give up 2.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

E Split Corp  vs.  Manulife Multifactor Developed

 Performance 
       Timeline  
E Split Corp 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Developed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

E Split and Manulife Multifactor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with E Split and Manulife Multifactor

The main advantage of trading using opposite E Split and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split 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 E Split Corp and Manulife Multifactor Developed 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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