Correlation Between Manulife Multifactor and Fidelity High

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

By analyzing existing cross correlation between Manulife Multifactor Canadian and Fidelity High Quality, you can compare the effects of market volatilities on Manulife Multifactor and Fidelity High 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 Multifactor with a short position of Fidelity High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Multifactor and Fidelity High.

Diversification Opportunities for Manulife Multifactor and Fidelity High

0.91

Correlation Coefficient

Manulife Multifactor  Fidelity High

Almost no diversification

The 3 months correlation between Manulife and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Canadian and Fidelity High Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity High Quality and Manulife Multifactor 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 Multifactor Canadian are associated (or correlated) with Fidelity High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity High Quality has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Fidelity High go up and down completely randomly.

Pair Corralation between Manulife Multifactor and Fidelity High

Assuming the 90 days trading horizon Manulife Multifactor Canadian is expected to generate 0.48 times more return on investment than Fidelity High. However, Manulife Multifactor Canadian is 2.07 times less risky than Fidelity High. It trades about 0.43 of its potential returns per unit of risk. Fidelity High Quality is currently generating about 0.19 per unit of risk. If you would invest  4,133  in Manulife Multifactor Canadian on April 24, 2025 and sell it today you would earn a total of  427.00  from holding Manulife Multifactor Canadian or generate 10.33% return on investment over 90 days.

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

Manulife Multifactor Canadian  vs.  Fidelity High Quality

Manulife Multifactor

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Canadian are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Manulife Multifactor may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fidelity High Quality

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Quality are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Manulife Multifactor and Fidelity High

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

The idea behind Manulife Multifactor Canadian and Fidelity High Quality 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.