Correlation Between International Petroleum and Maha Energy

Can any of the company-specific risk be diversified away by investing in both International Petroleum and Maha Energy 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 International Petroleum and Maha Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Petroleum Corp and Maha Energy AB, you can compare the effects of market volatilities on International Petroleum and Maha Energy 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 International Petroleum with a short position of Maha Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Petroleum and Maha Energy.

Diversification Opportunities for International Petroleum and Maha Energy

0.0

Correlation Coefficient

International Petroleum  Maha Energy

Pay attention - limited upside

The 3 months correlation between International and Maha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Petroleum Corp and Maha Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Energy AB and International 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 International Petroleum Corp are associated (or correlated) with Maha Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Energy AB has no effect on the direction of International Petroleum i.e., International Petroleum and Maha Energy go up and down completely randomly.

Pair Corralation between International Petroleum and Maha Energy

If you would invest  620.00  in Maha Energy AB on October 7, 2024 and sell it today you would earn a total of  77.00  from holding Maha Energy AB or generate 12.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

International Petroleum Corp  vs.  Maha Energy AB

International Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Petroleum Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, International Petroleum is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Maha Energy AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Energy AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Maha Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Petroleum and Maha Energy

The main advantage of trading using opposite International Petroleum and Maha Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Petroleum position performs unexpectedly, Maha Energy 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 Maha Energy will offset losses from the drop in Maha Energy's long position.

The idea behind International Petroleum Corp and Maha Energy AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.