Correlation Between Manulife Financial and Chemtrade Logistics
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Manulife Financial Corp vs. Chemtrade Logistics Income
Performance |
Timeline |
Manulife Financial Corp |
Chemtrade Logistics |
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.Manulife Financial vs. American Hotel Income | Manulife Financial vs. Diamond Estates Wines | Manulife Financial vs. Quorum Information Technologies | Manulife Financial vs. Rogers Communications |
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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 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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