Correlation Between Mari Petroleum and ORIX Leasing
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and ORIX Leasing 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 ORIX Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and ORIX Leasing Pakistan, you can compare the effects of market volatilities on Mari Petroleum and ORIX Leasing 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 ORIX Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and ORIX Leasing.
Diversification Opportunities for Mari Petroleum and ORIX Leasing
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mari and ORIX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and ORIX Leasing Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX Leasing Pakistan 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 ORIX Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX Leasing Pakistan has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and ORIX Leasing go up and down completely randomly.
Pair Corralation between Mari Petroleum and ORIX Leasing
Assuming the 90 days trading horizon Mari Petroleum is expected to under-perform the ORIX Leasing. In addition to that, Mari Petroleum is 1.21 times more volatile than ORIX Leasing Pakistan. It trades about -0.39 of its total potential returns per unit of risk. ORIX Leasing Pakistan is currently generating about 0.06 per unit of volatility. If you would invest 3,602 in ORIX Leasing Pakistan on October 29, 2024 and sell it today you would earn a total of 81.00 from holding ORIX Leasing Pakistan or generate 2.25% 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. ORIX Leasing Pakistan
Performance |
| Timeline |
| Mari Petroleum |
| ORIX Leasing Pakistan |
Mari Petroleum and ORIX Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and ORIX Leasing
The main advantage of trading using opposite Mari Petroleum and ORIX Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, ORIX Leasing 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 ORIX Leasing will offset losses from the drop in ORIX Leasing's long position.| Mari Petroleum vs. Engro Polymer Chemicals | Mari Petroleum vs. Pakistan Telecommunication | Mari Petroleum vs. Air Link Communication | Mari Petroleum vs. East West Insurance |
| ORIX Leasing vs. Murree Brewery | ORIX Leasing vs. Crescent Star Insurance | ORIX Leasing vs. IGI Life Insurance | ORIX Leasing vs. Pakistan Aluminium Beverage |
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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