Correlation Between Mari Petroleum and Atlas Insurance
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Atlas Insurance 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 Atlas Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Atlas Insurance, you can compare the effects of market volatilities on Mari Petroleum and Atlas Insurance 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 Atlas Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Atlas Insurance.
Diversification Opportunities for Mari Petroleum and Atlas Insurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mari and Atlas is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance 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 Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Atlas Insurance go up and down completely randomly.
Pair Corralation between Mari Petroleum and Atlas Insurance
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 3.27 times more return on investment than Atlas Insurance. However, Mari Petroleum is 3.27 times more volatile than Atlas Insurance. It trades about 0.13 of its potential returns per unit of risk. Atlas Insurance is currently generating about 0.17 per unit of risk. If you would invest 17,045 in Mari Petroleum on November 1, 2024 and sell it today you would earn a total of 37,682 from holding Mari Petroleum or generate 221.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.38% |
| Values | Daily Returns |
Mari Petroleum vs. Atlas Insurance
Performance |
| Timeline |
| Mari Petroleum |
| Atlas Insurance |
Mari Petroleum and Atlas Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Atlas Insurance
The main advantage of trading using opposite Mari Petroleum and Atlas Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Atlas Insurance 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 Atlas Insurance will offset losses from the drop in Atlas Insurance's long position.| Mari Petroleum vs. Ghani Chemical Industries | Mari Petroleum vs. Ittehad Chemicals | Mari Petroleum vs. Universal Insurance | Mari Petroleum vs. TPL Insurance |
| Atlas Insurance vs. Askari General Insurance | Atlas Insurance vs. Habib Insurance | Atlas Insurance vs. MCB Investment Manag | Atlas Insurance vs. Shaheen 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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