Correlation Between IShares Core and Manulife Multifactor
Can any of the company-specific risk be diversified away by investing in both IShares Core and Manulife Multifactor 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 IShares Core and Manulife Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Canadian and Manulife Multifactor Canadian, you can compare the effects of market volatilities on IShares Core and Manulife Multifactor 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 IShares Core with a short position of Manulife Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Manulife Multifactor.
Diversification Opportunities for IShares Core and Manulife Multifactor
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Manulife is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Canadian and Manulife Multifactor Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Multifactor and IShares Core 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 iShares Core Canadian are associated (or correlated) with Manulife Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Multifactor has no effect on the direction of IShares Core i.e., IShares Core and Manulife Multifactor go up and down completely randomly.
Pair Corralation between IShares Core and Manulife Multifactor
Assuming the 90 days trading horizon IShares Core is expected to generate 1.79 times less return on investment than Manulife Multifactor. But when comparing it to its historical volatility, iShares Core Canadian is 4.36 times less risky than Manulife Multifactor. It trades about 0.13 of its potential returns per unit of risk. Manulife Multifactor Canadian is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,345 in Manulife Multifactor Canadian on September 23, 2024 and sell it today you would earn a total of 793.00 from holding Manulife Multifactor Canadian or generate 23.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Core Canadian vs. Manulife Multifactor Canadian
Performance |
Timeline |
iShares Core Canadian |
Manulife Multifactor |
IShares Core and Manulife Multifactor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and Manulife Multifactor
The main advantage of trading using opposite IShares Core and Manulife Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Manulife Multifactor 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 Multifactor will offset losses from the drop in Manulife Multifactor's long position.IShares Core vs. Dynamic Active Crossover | IShares Core vs. Dynamic Active Tactical | IShares Core vs. Dynamic Active Preferred | IShares Core vs. Dynamic Active Canadian |
Manulife Multifactor vs. iShares ESG Aware | Manulife Multifactor vs. iShares Core Canadian | Manulife Multifactor vs. Vanguard Global Momentum | Manulife Multifactor vs. iShares SP Global |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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