Correlation Between Jubilee Life and Mari Petroleum
Can any of the company-specific risk be diversified away by investing in both Jubilee Life 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 Jubilee Life and Mari Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jubilee Life Insurance and Mari Petroleum, you can compare the effects of market volatilities on Jubilee Life 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 Jubilee Life with a short position of Mari Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Mari Petroleum.
Diversification Opportunities for Jubilee Life and Mari Petroleum
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jubilee and Mari is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Mari Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mari Petroleum and Jubilee Life 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 Jubilee Life Insurance 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 Jubilee Life i.e., Jubilee Life and Mari Petroleum go up and down completely randomly.
Pair Corralation between Jubilee Life and Mari Petroleum
Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.37 times more return on investment than Mari Petroleum. However, Jubilee Life Insurance is 2.72 times less risky than Mari Petroleum. It trades about -0.08 of its potential returns per unit of risk. Mari Petroleum is currently generating about -0.16 per unit of risk. If you would invest 17,686 in Jubilee Life Insurance on November 7, 2024 and sell it today you would lose (512.00) from holding Jubilee Life Insurance or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Life Insurance vs. Mari Petroleum
Performance |
| Timeline |
| Jubilee Life Insurance |
| Mari Petroleum |
Jubilee Life and Mari Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Life and Mari Petroleum
The main advantage of trading using opposite Jubilee Life and Mari Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life 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.| Jubilee Life vs. Masood Textile Mills | Jubilee Life vs. Fauji Foods | Jubilee Life vs. KSB Pumps | Jubilee Life vs. Mari Petroleum |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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