Correlation Between Mari Petroleum and Hub Power
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Hub Power 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 Hub Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Hub Power, you can compare the effects of market volatilities on Mari Petroleum and Hub Power 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 Hub Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Hub Power.
Diversification Opportunities for Mari Petroleum and Hub Power
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mari and Hub is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Hub Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Power 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 Hub Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Power has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Hub Power go up and down completely randomly.
Pair Corralation between Mari Petroleum and Hub Power
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 1.53 times more return on investment than Hub Power. However, Mari Petroleum is 1.53 times more volatile than Hub Power. It trades about 0.14 of its potential returns per unit of risk. Hub Power is currently generating about 0.15 per unit of risk. If you would invest 43,202 in Mari Petroleum on October 25, 2024 and sell it today you would earn a total of 16,323 from holding Mari Petroleum or generate 37.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mari Petroleum vs. Hub Power
Performance |
| Timeline |
| Mari Petroleum |
| Hub Power |
Mari Petroleum and Hub Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Hub Power
The main advantage of trading using opposite Mari Petroleum and Hub Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Hub Power 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 Hub Power will offset losses from the drop in Hub Power's long position.| Mari Petroleum vs. Amreli Steels | Mari Petroleum vs. JS Investments | Mari Petroleum vs. Air Link Communication | Mari Petroleum vs. Metropolitan Steel Corp |
| Hub Power vs. ITTEFAQ Iron Industries | Hub Power vs. JS Investments | Hub Power vs. Wah Nobel Chemicals | Hub Power vs. International Steels |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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