Correlation Between National Bank and Mari Petroleum
Can any of the company-specific risk be diversified away by investing in both National Bank and Mari Petroleum 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 National Bank and Mari Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Mari Petroleum, you can compare the effects of market volatilities on National Bank and Mari Petroleum 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 National Bank with a short position of Mari Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Mari Petroleum.
Diversification Opportunities for National Bank and Mari Petroleum
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Mari is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Mari Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mari Petroleum and National Bank 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 National Bank of are associated (or correlated) with Mari Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mari Petroleum has no effect on the direction of National Bank i.e., National Bank and Mari Petroleum go up and down completely randomly.
Pair Corralation between National Bank and Mari Petroleum
Assuming the 90 days trading horizon National Bank of is expected to under-perform the Mari Petroleum. In addition to that, National Bank is 1.2 times more volatile than Mari Petroleum. It trades about -0.03 of its total potential returns per unit of risk. Mari Petroleum is currently generating about 0.04 per unit of volatility. If you would invest 42,608 in Mari Petroleum on August 29, 2024 and sell it today you would earn a total of 738.00 from holding Mari Petroleum or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Mari Petroleum
Performance |
| Timeline |
| National Bank |
| Mari Petroleum |
National Bank and Mari Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Mari Petroleum
The main advantage of trading using opposite National Bank and Mari Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Mari Petroleum 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 Mari Petroleum will offset losses from the drop in Mari Petroleum's long position.| National Bank vs. Masood Textile Mills | National Bank vs. Fauji Foods | National Bank vs. KSB Pumps | National Bank vs. Mari Petroleum |
| Mari Petroleum vs. Shifa International Hospitals | Mari Petroleum vs. Honda Atlas Cars | Mari Petroleum vs. AKD Hospitality | Mari Petroleum vs. Jubilee Life Insurance |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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