Correlation Between Mari Petroleum and Jubilee Life
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Jubilee Life 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 Jubilee Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Jubilee Life Insurance, you can compare the effects of market volatilities on Mari Petroleum and Jubilee Life 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 Jubilee Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Jubilee Life.
Diversification Opportunities for Mari Petroleum and Jubilee Life
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mari and Jubilee is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life 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 Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Jubilee Life go up and down completely randomly.
Pair Corralation between Mari Petroleum and Jubilee Life
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 0.91 times more return on investment than Jubilee Life. However, Mari Petroleum is 1.1 times less risky than Jubilee Life. It trades about 0.66 of its potential returns per unit of risk. Jubilee Life Insurance is currently generating about 0.39 per unit of risk. If you would invest 41,043 in Mari Petroleum on September 12, 2024 and sell it today you would earn a total of 28,971 from holding Mari Petroleum or generate 70.59% 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. Jubilee Life Insurance
Performance |
| Timeline |
| Mari Petroleum |
| Jubilee Life Insurance |
Mari Petroleum and Jubilee Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Jubilee Life
The main advantage of trading using opposite Mari Petroleum and Jubilee Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Jubilee Life 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 Jubilee Life will offset losses from the drop in Jubilee Life's long position.| Mari Petroleum vs. Oil and Gas | Mari Petroleum vs. Pakistan State Oil | Mari Petroleum vs. Pakistan Petroleum | Mari Petroleum vs. Fauji Fertilizer |
| Jubilee Life vs. Masood Textile Mills | Jubilee Life vs. Fauji Foods | Jubilee Life vs. KSB Pumps | Jubilee Life vs. Mari Petroleum |
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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