Correlation Between Manulife Financial and Siriuspoint

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

Diversification Opportunities for Manulife Financial and Siriuspoint

0.32

Correlation Coefficient

Manulife Financial  Siriuspoint

Weak diversification

The 3 months correlation between Manulife and Siriuspoint is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Manulife Financial Corp and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Manulife Financial i.e., Manulife Financial and Siriuspoint go up and down completely randomly.

Pair Corralation between Manulife Financial and Siriuspoint

Considering the 90-day investment horizon Manulife Financial is expected to generate 6.55 times less return on investment than Siriuspoint. But when comparing it to its historical volatility, Manulife Financial Corp is 1.69 times less risky than Siriuspoint. It trades about 0.04 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,694  in Siriuspoint on May 1, 2025 and sell it today you would earn a total of  292.00  from holding Siriuspoint or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Manulife Financial Corp  vs.  Siriuspoint

Manulife Financial Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Manulife Financial is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Siriuspoint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manulife Financial and Siriuspoint

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

The idea behind Manulife Financial Corp and Siriuspoint 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.