Correlation Between Manulife Financial and ASM International

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

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

Diversification Opportunities for Manulife Financial and ASM International

0.0

Correlation Coefficient

Manulife Financial  ASM International

Pay attention - limited upside

The 3 months correlation between Manulife and ASM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Manulife Financial 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 Manulife Financial Corp are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Manulife Financial i.e., Manulife Financial and ASM International go up and down completely randomly.

Pair Corralation between Manulife Financial and ASM International

If you would invest  2,183  in Manulife Financial Corp on February 13, 2024 and sell it today you would earn a total of  422.00  from holding Manulife Financial Corp or generate 19.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Manulife Financial Corp  vs.  ASM International NV

Manulife Financial Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Manulife Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

ASM International

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ASM International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Manulife Financial and ASM International

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

The idea behind Manulife Financial Corp and ASM International NV 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.