Correlation Between Mari Petroleum and Media Times
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Media Times 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 Media Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Media Times, you can compare the effects of market volatilities on Mari Petroleum and Media Times 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 Media Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Media Times.
Diversification Opportunities for Mari Petroleum and Media Times
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mari and Media is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Media Times in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Times 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 Media Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Times has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Media Times go up and down completely randomly.
Pair Corralation between Mari Petroleum and Media Times
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 0.74 times more return on investment than Media Times. However, Mari Petroleum is 1.35 times less risky than Media Times. It trades about 0.14 of its potential returns per unit of risk. Media Times is currently generating about 0.05 per unit of risk. If you would invest 16,462 in Mari Petroleum on August 27, 2024 and sell it today you would earn a total of 29,854 from holding Mari Petroleum or generate 181.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mari Petroleum vs. Media Times
Performance |
| Timeline |
| Mari Petroleum |
| Media Times |
Mari Petroleum and Media Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Media Times
The main advantage of trading using opposite Mari Petroleum and Media Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Media Times 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 Media Times will offset losses from the drop in Media Times' long position.| Mari Petroleum vs. United Insurance | Mari Petroleum vs. Atlas Insurance | Mari Petroleum vs. Adamjee Insurance | Mari Petroleum vs. East West Insurance |
| Media Times vs. Masood Textile Mills | Media Times vs. Fauji Foods | Media Times vs. KSB Pumps | Media Times 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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