Correlation Between Storage Vault and Manulife Financial

Can any of the company-specific risk be diversified away by investing in both Storage Vault and Manulife 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 Storage Vault and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Storage Vault Canada and Manulife Financial Corp, you can compare the effects of market volatilities on Storage Vault and Manulife 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 Storage Vault with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storage Vault and Manulife Financial.

Diversification Opportunities for Storage Vault and Manulife Financial

0.7

Correlation Coefficient

Storage Vault  Manulife Financial

Poor diversification

The 3 months correlation between Storage and Manulife is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Storage Vault Canada and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Storage Vault 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 Storage Vault Canada are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Storage Vault i.e., Storage Vault and Manulife Financial go up and down completely randomly.

Pair Corralation between Storage Vault and Manulife Financial

Assuming the 90 days trading horizon Storage Vault Canada is expected to generate 7.72 times more return on investment than Manulife Financial. However, Storage Vault is 7.72 times more volatile than Manulife Financial Corp. It trades about 0.25 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.05 per unit of risk. If you would invest  402.00  in Storage Vault Canada on May 2, 2025 and sell it today you would earn a total of  67.00  from holding Storage Vault Canada or generate 16.67% return on investment over 90 days.

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

Storage Vault Canada  vs.  Manulife Financial Corp

Storage Vault Canada

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Storage Vault Canada are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Storage Vault displayed solid returns over the last few months and may actually be approaching a breakup point.

Manulife Financial Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 29 (%) 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.

Pair Trading with Storage Vault and Manulife Financial

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

The idea behind Storage Vault Canada and Manulife 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.