Correlation Between Loads and Mari Petroleum

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

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

Diversification Opportunities for Loads and Mari Petroleum

-0.72

Correlation Coefficient

Loads  Mari Petroleum

Pay attention - limited upside

The 3 months correlation between Loads and Mari is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Loads and Mari Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mari Petroleum and Loads 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 Loads 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 Loads i.e., Loads and Mari Petroleum go up and down completely randomly.

Pair Corralation between Loads and Mari Petroleum

Assuming the 90 days trading horizon Loads is expected to generate 1.09 times more return on investment than Mari Petroleum. However, Loads is 1.09 times more volatile than Mari Petroleum. It trades about 0.08 of its potential returns per unit of risk. Mari Petroleum is currently generating about -0.01 per unit of risk. If you would invest  1,525  in Loads on December 30, 2024 and sell it today you would earn a total of  241.00  from holding Loads or generate 15.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Loads  vs.  Mari Petroleum

Loads

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loads are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Loads disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mari Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mari Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mari Petroleum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Loads and Mari Petroleum

The main advantage of trading using opposite Loads and Mari Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loads 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.

The idea behind Loads and Mari Petroleum 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.