Correlation Between Mari Petroleum and Arif Habib
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Arif Habib 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 Mari Petroleum and Arif Habib into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Arif Habib, you can compare the effects of market volatilities on Mari Petroleum and Arif Habib 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 Mari Petroleum with a short position of Arif Habib. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Arif Habib.
Diversification Opportunities for Mari Petroleum and Arif Habib
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mari and Arif is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Arif Habib in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arif Habib and Mari Petroleum 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 Mari Petroleum are associated (or correlated) with Arif Habib. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arif Habib has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Arif Habib go up and down completely randomly.
Pair Corralation between Mari Petroleum and Arif Habib
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 2.46 times less return on investment than Arif Habib. But when comparing it to its historical volatility, Mari Petroleum is 1.7 times less risky than Arif Habib. It trades about 0.16 of its potential returns per unit of risk. Arif Habib is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,651 in Arif Habib on August 30, 2024 and sell it today you would earn a total of 1,251 from holding Arif Habib or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mari Petroleum vs. Arif Habib
Performance |
| Timeline |
| Mari Petroleum |
| Arif Habib |
Mari Petroleum and Arif Habib Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Arif Habib
The main advantage of trading using opposite Mari Petroleum and Arif Habib positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Arif Habib 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 Arif Habib will offset losses from the drop in Arif Habib's long position.| Mari Petroleum vs. Habib Bank | Mari Petroleum vs. National Bank of | Mari Petroleum vs. United Bank | Mari Petroleum vs. MCB Bank |
| Arif Habib vs. Escorts Investment Bank | Arif Habib vs. Shaheen Insurance | Arif Habib vs. Ittehad Chemicals | Arif Habib vs. Askari General 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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