Correlation Between Manulife Financial and Invesco Summit

Can any of the company-specific risk be diversified away by investing in both Manulife Financial and Invesco Summit 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 Invesco Summit 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 Invesco Summit Fund, you can compare the effects of market volatilities on Manulife Financial and Invesco Summit 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 Invesco Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and Invesco Summit.

Diversification Opportunities for Manulife Financial and Invesco Summit

0.87

Correlation Coefficient

Manulife Financial  Invesco Summit

Very poor diversification

The 3 months correlation between Manulife and Invesco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Invesco Summit Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Summit 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 Invesco Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Summit has no effect on the direction of Manulife Financial i.e., Manulife Financial and Invesco Summit go up and down completely randomly.

Pair Corralation between Manulife Financial and Invesco Summit

Considering the 90-day investment horizon Manulife Financial Corp is expected to under-perform the Invesco Summit. In addition to that, Manulife Financial is 1.14 times more volatile than Invesco Summit Fund. It trades about -0.23 of its total potential returns per unit of risk. Invesco Summit Fund is currently generating about -0.12 per unit of volatility. If you would invest  2,563  in Invesco Summit Fund on January 19, 2024 and sell it today you would lose (71.00) from holding Invesco Summit Fund or give up 2.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Manulife Financial Corp  vs.  Invesco Summit Fund

Manulife Financial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Manulife Financial may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Invesco Summit

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Summit Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Summit may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Manulife Financial and Invesco Summit

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

The idea behind Manulife Financial Corp and Invesco Summit Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.