Correlation Between North American and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both North American and Manulife Financial 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 North American and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Financial and Manulife Financial Corp, you can compare the effects of market volatilities on North American and Manulife Financial 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 North American with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Manulife Financial.
Diversification Opportunities for North American and Manulife Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between North and Manulife is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and North American 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 North American Financial are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of North American i.e., North American and Manulife Financial go up and down completely randomly.
Pair Corralation between North American and Manulife Financial
Assuming the 90 days trading horizon North American Financial is expected to generate 1.39 times more return on investment than Manulife Financial. However, North American is 1.39 times more volatile than Manulife Financial Corp. It trades about 0.33 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.05 per unit of risk. If you would invest 714.00 in North American Financial on September 9, 2025 and sell it today you would earn a total of 152.00 from holding North American Financial or generate 21.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Financial vs. Manulife Financial Corp
Performance |
| Timeline |
| North American Financial |
| Manulife Financial Corp |
North American and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Manulife Financial
The main advantage of trading using opposite North American and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Manulife Financial 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 Financial will offset losses from the drop in Manulife Financial's long position.| North American vs. Life Banc Split | North American vs. Dividend Growth Split | North American vs. Queens Road Capital | North American vs. Canadian Banc Corp |
| Manulife Financial vs. Booking CDR | Manulife Financial vs. BLACKROCK CDR | Manulife Financial vs. Fairfax Financial Holdings | Manulife Financial vs. Fairfax Financial Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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