Correlation Between Manulife Multifactor and Purpose Best

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

By analyzing existing cross correlation between Manulife Multifactor Mid and Purpose Best Ideas, you can compare the effects of market volatilities on Manulife Multifactor and Purpose Best 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 Purpose Best. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Multifactor and Purpose Best.

Diversification Opportunities for Manulife Multifactor and Purpose Best

0.97

Correlation Coefficient

Manulife Multifactor  Purpose Best

Almost no diversification

The 3 months correlation between Manulife and Purpose is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Mid and Purpose Best Ideas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Best Ideas 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 Mid are associated (or correlated) with Purpose Best. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Best Ideas has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Purpose Best go up and down completely randomly.

Pair Corralation between Manulife Multifactor and Purpose Best

Assuming the 90 days trading horizon Manulife Multifactor is expected to generate 1.07 times less return on investment than Purpose Best. In addition to that, Manulife Multifactor is 1.13 times more volatile than Purpose Best Ideas. It trades about 0.24 of its total potential returns per unit of risk. Purpose Best Ideas is currently generating about 0.29 per unit of volatility. If you would invest  4,187  in Purpose Best Ideas on April 23, 2025 and sell it today you would earn a total of  684.00  from holding Purpose Best Ideas or generate 16.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Manulife Multifactor Mid  vs.  Purpose Best Ideas

Manulife Multifactor Mid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Multifactor Mid are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Manulife Multifactor displayed solid returns over the last few months and may actually be approaching a breakup point.

Purpose Best Ideas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Best Ideas are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Purpose Best displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manulife Multifactor and Purpose Best

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

The idea behind Manulife Multifactor Mid and Purpose Best Ideas 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.