Correlation Between Ittehad Chemicals and Mari Petroleum
Can any of the company-specific risk be diversified away by investing in both Ittehad Chemicals and Mari Petroleum 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 Ittehad Chemicals and Mari Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ittehad Chemicals and Mari Petroleum, you can compare the effects of market volatilities on Ittehad Chemicals and Mari Petroleum 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 Ittehad Chemicals with a short position of Mari Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ittehad Chemicals and Mari Petroleum.
Diversification Opportunities for Ittehad Chemicals and Mari Petroleum
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ittehad and Mari is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ittehad Chemicals and Mari Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mari Petroleum and Ittehad Chemicals 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 Ittehad Chemicals are associated (or correlated) with Mari Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mari Petroleum has no effect on the direction of Ittehad Chemicals i.e., Ittehad Chemicals and Mari Petroleum go up and down completely randomly.
Pair Corralation between Ittehad Chemicals and Mari Petroleum
Assuming the 90 days trading horizon Ittehad Chemicals is expected to generate 0.78 times more return on investment than Mari Petroleum. However, Ittehad Chemicals is 1.29 times less risky than Mari Petroleum. It trades about 0.22 of its potential returns per unit of risk. Mari Petroleum is currently generating about 0.12 per unit of risk. If you would invest 4,605 in Ittehad Chemicals on November 8, 2024 and sell it today you would earn a total of 2,731 from holding Ittehad Chemicals or generate 59.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ittehad Chemicals vs. Mari Petroleum
Performance |
| Timeline |
| Ittehad Chemicals |
| Mari Petroleum |
Ittehad Chemicals and Mari Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ittehad Chemicals and Mari Petroleum
The main advantage of trading using opposite Ittehad Chemicals and Mari Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ittehad Chemicals position performs unexpectedly, Mari Petroleum 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 Mari Petroleum will offset losses from the drop in Mari Petroleum's long position.| Ittehad Chemicals vs. Supernet Technologie | Ittehad Chemicals vs. Unilever Pakistan Foods | Ittehad Chemicals vs. National Foods | Ittehad Chemicals vs. Fauji Foods |
| Mari Petroleum vs. IGI Life Insurance | Mari Petroleum vs. United Insurance | Mari Petroleum vs. EFU General Insurance | Mari Petroleum vs. Universal Insurance |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |