Correlation Between Manulife Financial and STI Education

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

Diversification Opportunities for Manulife Financial and STI Education

0.0

Correlation Coefficient

Manulife Financial  STI Education

Pay attention - limited upside

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

Pair Corralation between Manulife Financial and STI Education

Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 2.36 times more return on investment than STI Education. However, Manulife Financial is 2.36 times more volatile than STI Education Systems. It trades about 0.06 of its potential returns per unit of risk. STI Education Systems is currently generating about 0.13 per unit of risk. If you would invest  90,815  in Manulife Financial Corp on April 13, 2025 and sell it today you would earn a total of  71,185  from holding Manulife Financial Corp or generate 78.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	66.13%
Values	Daily Returns

Manulife Financial Corp  vs.  STI Education Systems

Manulife Financial Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Manulife Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

STI Education Systems

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STI Education Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, STI Education exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manulife Financial and STI Education

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

The idea behind Manulife Financial Corp and STI Education Systems 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.