Correlation Between Tangerine Equity and Manulife Global

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

By analyzing existing cross correlation between Tangerine Equity Growth and Manulife Global Equity, you can compare the effects of market volatilities on Tangerine Equity and Manulife Global 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 Tangerine Equity with a short position of Manulife Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tangerine Equity and Manulife Global.

Diversification Opportunities for Tangerine Equity and Manulife Global

0.93

Correlation Coefficient

Tangerine Equity  Manulife Global

Almost no diversification

The 3 months correlation between Tangerine and Manulife is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tangerine Equity Growth and Manulife Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Global Equity and Tangerine Equity 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 Tangerine Equity Growth are associated (or correlated) with Manulife Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Global Equity has no effect on the direction of Tangerine Equity i.e., Tangerine Equity and Manulife Global go up and down completely randomly.

Pair Corralation between Tangerine Equity and Manulife Global

Assuming the 90 days trading horizon Tangerine Equity Growth is expected to generate 1.05 times more return on investment than Manulife Global. However, Tangerine Equity is 1.05 times more volatile than Manulife Global Equity. It trades about 0.14 of its potential returns per unit of risk. Manulife Global Equity is currently generating about 0.1 per unit of risk. If you would invest  990.00  in Tangerine Equity Growth on September 29, 2024 and sell it today you would earn a total of  483.00  from holding Tangerine Equity Growth or generate 48.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Tangerine Equity Growth  vs.  Manulife Global Equity

Tangerine Equity Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tangerine Equity Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Tangerine Equity is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Manulife Global Equity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Global Equity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Manulife Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tangerine Equity and Manulife Global

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

The idea behind Tangerine Equity Growth and Manulife Global Equity 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.