Correlation Between Manulife Financial and CI Financial

Can any of the company-specific risk be diversified away by investing in both Manulife Financial and CI 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 Manulife Financial and CI Financial 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 CI Financial Corp, you can compare the effects of market volatilities on Manulife Financial and CI 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 Manulife Financial with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manulife Financial and CI Financial.

Diversification Opportunities for Manulife Financial and CI Financial

0.86

Correlation Coefficient

Manulife Financial  CI Financial

Very poor diversification

The 3 months correlation between Manulife and CIX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp 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 CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Manulife Financial i.e., Manulife Financial and CI Financial go up and down completely randomly.

Pair Corralation between Manulife Financial and CI Financial

Assuming the 90 days trading horizon Manulife Financial Corp is expected to generate 5.83 times more return on investment than CI Financial. However, Manulife Financial is 5.83 times more volatile than CI Financial Corp. It trades about 0.32 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.13 per unit of risk. If you would invest  1,648  in Manulife Financial Corp on May 13, 2025 and sell it today you would earn a total of  269.00  from holding Manulife Financial Corp or generate 16.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Manulife Financial Corp  vs.  CI Financial Corp

Manulife Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, Manulife Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

CI Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Manulife Financial and CI Financial

The main advantage of trading using opposite Manulife Financial and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manulife Financial position performs unexpectedly, CI 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 CI Financial will offset losses from the drop in CI Financial's long position.

The idea behind Manulife Financial Corp and CI Financial Corp 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.