Correlation Between Sprott Physical and Manulife Finl

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

By analyzing existing cross correlation between Sprott Physical Gold and Manulife Finl Srs, you can compare the effects of market volatilities on Sprott Physical and Manulife Finl 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 Sprott Physical with a short position of Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Manulife Finl.

Diversification Opportunities for Sprott Physical and Manulife Finl

-0.45

Correlation Coefficient

Sprott Physical  Manulife Finl

Very good diversification

The 3 months correlation between Sprott and Manulife is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs and Sprott Physical 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 Sprott Physical Gold are associated (or correlated) with Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Sprott Physical i.e., Sprott Physical and Manulife Finl go up and down completely randomly.

Pair Corralation between Sprott Physical and Manulife Finl

Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 2.17 times more return on investment than Manulife Finl. However, Sprott Physical is 2.17 times more volatile than Manulife Finl Srs. It trades about 0.14 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about -0.08 per unit of risk. If you would invest  3,099  in Sprott Physical Gold on September 2, 2024 and sell it today you would earn a total of  333.00  from holding Sprott Physical Gold or generate 10.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sprott Physical Gold  vs.  Manulife Finl Srs

Sprott Physical Gold

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Manulife Finl Srs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manulife Finl Srs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Manulife Finl is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sprott Physical and Manulife Finl

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

The idea behind Sprott Physical Gold and Manulife Finl Srs 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.