Correlation Between Manulife Financial and DIRTT Environmental

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Manulife Financial Corp  vs.  DIRTT Environmental Solutions

 Performance 
       Timeline  
Manulife Financial Corp 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Manulife Financial sustained solid returns over the last few months and may actually be approaching a breakup point.
DIRTT Environmental 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days DIRTT Environmental Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, DIRTT Environmental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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.
The idea behind Manulife Financial Corp and DIRTT Environmental Solutions 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.
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..

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm