Correlation Between Mari Petroleum and Habib Bank
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Habib Bank 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 Habib Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Habib Bank, you can compare the effects of market volatilities on Mari Petroleum and Habib Bank 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 Habib Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Habib Bank.
Diversification Opportunities for Mari Petroleum and Habib Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mari and Habib is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Habib Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Bank 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 Habib Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Bank has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Habib Bank go up and down completely randomly.
Pair Corralation between Mari Petroleum and Habib Bank
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 2.63 times more return on investment than Habib Bank. However, Mari Petroleum is 2.63 times more volatile than Habib Bank. It trades about 0.1 of its potential returns per unit of risk. Habib Bank is currently generating about -0.51 per unit of risk. If you would invest 53,646 in Mari Petroleum on November 27, 2024 and sell it today you would earn a total of 2,800 from holding Mari Petroleum or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mari Petroleum vs. Habib Bank
Performance |
| Timeline |
| Mari Petroleum |
| Habib Bank |
Mari Petroleum and Habib Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Habib Bank
The main advantage of trading using opposite Mari Petroleum and Habib Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Habib Bank 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 Habib Bank will offset losses from the drop in Habib Bank's long position.| Mari Petroleum vs. Pakistan Telecommunication | Mari Petroleum vs. NetSol Technologies | Mari Petroleum vs. Shaheen Insurance | Mari Petroleum vs. Air Link Communication |
| Habib Bank vs. Pakistan Tobacco | Habib Bank vs. Supernet Technologie | Habib Bank vs. Hi Tech Lubricants | Habib Bank vs. Crescent Steel Allied |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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