Correlation Between Manulife Financial and Chemtrade Logistics

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

Diversification Opportunities for Manulife Financial and Chemtrade Logistics

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Manulife and Chemtrade is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics 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 Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Manulife Financial i.e., Manulife Financial and Chemtrade Logistics go up and down completely randomly.

Pair Corralation between Manulife Financial and Chemtrade Logistics

Assuming the 90 days trading horizon Manulife Financial is expected to generate 2.21 times less return on investment than Chemtrade Logistics. But when comparing it to its historical volatility, Manulife Financial Corp is 2.87 times less risky than Chemtrade Logistics. It trades about 0.34 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  900.00  in Chemtrade Logistics Income on April 20, 2025 and sell it today you would earn a total of  216.00  from holding Chemtrade Logistics Income or generate 24.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

Manulife Financial Corp  vs.  Chemtrade Logistics Income

 Performance 
       Timeline  
Manulife Financial Corp 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Manulife Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Chemtrade Logistics 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Chemtrade Logistics Income are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Chemtrade Logistics sustained solid returns over the last few months and may actually be approaching a breakup point.

Manulife Financial and Chemtrade Logistics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Manulife Financial and Chemtrade Logistics

The main advantage of trading using opposite Manulife Financial and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.
The idea behind Manulife Financial Corp and Chemtrade Logistics Income 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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