Correlation Between Mari Petroleum and Shaheen Insurance
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Shaheen Insurance 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 Shaheen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Shaheen Insurance, you can compare the effects of market volatilities on Mari Petroleum and Shaheen Insurance 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 Shaheen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Shaheen Insurance.
Diversification Opportunities for Mari Petroleum and Shaheen Insurance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mari and Shaheen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Shaheen Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaheen 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 Shaheen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaheen Insurance has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Shaheen Insurance go up and down completely randomly.
Pair Corralation between Mari Petroleum and Shaheen Insurance
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 1.26 times more return on investment than Shaheen Insurance. However, Mari Petroleum is 1.26 times more volatile than Shaheen Insurance. It trades about 0.15 of its potential returns per unit of risk. Shaheen Insurance is currently generating about 0.08 per unit of risk. If you would invest 4,504 in Mari Petroleum on September 2, 2024 and sell it today you would earn a total of 41,718 from holding Mari Petroleum or generate 926.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.98% |
| Values | Daily Returns |
Mari Petroleum vs. Shaheen Insurance
Performance |
| Timeline |
| Mari Petroleum |
| Shaheen Insurance |
Mari Petroleum and Shaheen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Shaheen Insurance
The main advantage of trading using opposite Mari Petroleum and Shaheen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Shaheen Insurance 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 Shaheen Insurance will offset losses from the drop in Shaheen Insurance's long position.| Mari Petroleum vs. Pakistan State Oil | Mari Petroleum vs. K Electric | Mari Petroleum vs. Lucky Cement | Mari Petroleum vs. Engro |
| Shaheen Insurance vs. Habib Bank | Shaheen Insurance vs. National Bank of | Shaheen Insurance vs. United Bank | Shaheen Insurance vs. MCB Bank |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |