Correlation Between Manulife Financial and Boston Pizza

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

Diversification Opportunities for Manulife Financial and Boston Pizza

-0.47

Correlation Coefficient

Manulife Financial  Boston Pizza

Very good diversification

The 3 months correlation between Manulife and Boston is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Boston Pizza Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Pizza Royalties 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 Boston Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Pizza Royalties has no effect on the direction of Manulife Financial i.e., Manulife Financial and Boston Pizza go up and down completely randomly.

Pair Corralation between Manulife Financial and Boston Pizza

Assuming the 90 days trading horizon Manulife Financial Corp is expected to under-perform the Boston Pizza. In addition to that, Manulife Financial is 1.18 times more volatile than Boston Pizza Royalties. It trades about -0.04 of its total potential returns per unit of risk. Boston Pizza Royalties is currently generating about 0.23 per unit of volatility. If you would invest  1,891  in Boston Pizza Royalties on May 31, 2025 and sell it today you would earn a total of  274.00  from holding Boston Pizza Royalties or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Manulife Financial Corp  vs.  Boston Pizza Royalties

Manulife Financial Corp

Risk-Adjusted Performance

Weakest

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

Boston Pizza Royalties

Risk-Adjusted Performance

Solid

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

Pair Trading with Manulife Financial and Boston Pizza

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

The idea behind Manulife Financial Corp and Boston Pizza Royalties 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.