Correlation Between Telefonaktiebolaget and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget 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 Telefonaktiebolaget and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and Manulife Financial Corp, you can compare the effects of market volatilities on Telefonaktiebolaget 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 Telefonaktiebolaget with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and Manulife Financial.
Diversification Opportunities for Telefonaktiebolaget and Manulife Financial
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telefonaktiebolaget and Manulife is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso 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 Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson 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 Telefonaktiebolaget i.e., Telefonaktiebolaget and Manulife Financial go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and Manulife Financial
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to under-perform the Manulife Financial. In addition to that, Telefonaktiebolaget is 1.19 times more volatile than Manulife Financial Corp. It trades about -0.01 of its total potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,754 in Manulife Financial Corp on January 26, 2024 and sell it today you would earn a total of 594.00 from holding Manulife Financial Corp or generate 33.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.2% |
Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. Manulife Financial Corp
Performance |
Timeline |
Telefonaktiebolaget |
Manulife Financial Corp |
Telefonaktiebolaget and Manulife Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telefonaktiebolaget and Manulife Financial
The main advantage of trading using opposite Telefonaktiebolaget and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget 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.Telefonaktiebolaget vs. Goodbye Kansas Group | Telefonaktiebolaget vs. Enersize Oy | Telefonaktiebolaget vs. SaltX Technology Holding | Telefonaktiebolaget vs. Oncopeptides AB |
Manulife Financial vs. Lincoln National | Manulife Financial vs. Jackson Financial | Manulife Financial vs. Brighthouse Financial | Manulife Financial vs. Prudential Public Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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