Correlation Between Manulife Financial and DIRTT Environmental
Can any of the company-specific risk be diversified away by investing in both Manulife Financial and DIRTT Environmental 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 Financial and DIRTT Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manulife Financial Corp and DIRTT Environmental Solutions, you can compare the effects of market volatilities on Manulife Financial and DIRTT Environmental 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 Financial with a short position of DIRTT Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and DIRTT Environmental.
Diversification Opportunities for Manulife Financial and DIRTT Environmental
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manulife and DIRTT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and DIRTT Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIRTT Environmental and Manulife Financial 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 Financial Corp are associated (or correlated) with DIRTT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIRTT Environmental has no effect on the direction of Manulife Financial i.e., Manulife Financial and DIRTT Environmental go up and down completely randomly.
Pair Corralation between Manulife Financial and DIRTT Environmental
Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 0.34 times more return on investment than DIRTT Environmental. However, Manulife Financial Corp is 2.97 times less risky than DIRTT Environmental. It trades about 0.22 of its potential returns per unit of risk. DIRTT Environmental Solutions is currently generating about 0.01 per unit of risk. If you would invest 1,526 in Manulife Financial Corp on April 29, 2025 and sell it today you would earn a total of 323.00 from holding Manulife Financial Corp or generate 21.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Manulife Financial Corp vs. DIRTT Environmental Solutions
Performance |
Timeline |
Manulife Financial Corp |
DIRTT Environmental |
Manulife Financial and DIRTT Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Manulife Financial and DIRTT Environmental
The main advantage of trading using opposite Manulife Financial and DIRTT Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, DIRTT Environmental 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 DIRTT Environmental will offset losses from the drop in DIRTT Environmental's long position.Manulife Financial vs. Partners Value Investments | Manulife Financial vs. Major Drilling Group | Manulife Financial vs. Precision Drilling | Manulife Financial vs. Data Communications Management |
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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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