Correlation Between Manulife Multifactor and Global X
Can any of the company-specific risk be diversified away by investing in both Manulife Multifactor and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Multifactor Large and Global X SPTSX, you can compare the effects of market volatilities on Manulife Multifactor and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Multifactor and Global X.
Diversification Opportunities for Manulife Multifactor and Global X
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manulife and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Multifactor Large and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX 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 Large are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SPTSX has no effect on the direction of Manulife Multifactor i.e., Manulife Multifactor and Global X go up and down completely randomly.
Pair Corralation between Manulife Multifactor and Global X
Assuming the 90 days trading horizon Manulife Multifactor Large is expected to generate 0.75 times more return on investment than Global X. However, Manulife Multifactor Large is 1.33 times less risky than Global X. It trades about -0.12 of its potential returns per unit of risk. Global X SPTSX is currently generating about -0.16 per unit of risk. If you would invest 5,446 in Manulife Multifactor Large on September 26, 2024 and sell it today you would lose (104.00) from holding Manulife Multifactor Large or give up 1.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Manulife Multifactor Large vs. Global X SPTSX
Performance |
Timeline |
Manulife Multifactor |
Global X SPTSX |
Manulife Multifactor and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Manulife Multifactor and Global X
The main advantage of trading using opposite Manulife Multifactor and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Multifactor position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.Manulife Multifactor vs. Vanguard SP 500 | Manulife Multifactor vs. Vanguard FTSE Canadian | Manulife Multifactor vs. iShares NASDAQ 100 | Manulife Multifactor vs. Vanguard Total Market |
Global X vs. Manulife Multifactor Mid | Global X vs. Manulife Multifactor Canadian | Global X vs. Manulife Multifactor Large | Global X vs. Manulife Multifactor Canadian |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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