Correlation Between Mari Petroleum and Gul Ahmed
Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Gul Ahmed 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 Gul Ahmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mari Petroleum and Gul Ahmed Textile, you can compare the effects of market volatilities on Mari Petroleum and Gul Ahmed 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 Gul Ahmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Gul Ahmed.
Diversification Opportunities for Mari Petroleum and Gul Ahmed
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mari and Gul is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Gul Ahmed Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gul Ahmed Textile 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 Gul Ahmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gul Ahmed Textile has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Gul Ahmed go up and down completely randomly.
Pair Corralation between Mari Petroleum and Gul Ahmed
Assuming the 90 days trading horizon Mari Petroleum is expected to generate 1.47 times more return on investment than Gul Ahmed. However, Mari Petroleum is 1.47 times more volatile than Gul Ahmed Textile. It trades about -0.01 of its potential returns per unit of risk. Gul Ahmed Textile is currently generating about -0.02 per unit of risk. If you would invest 71,882 in Mari Petroleum on December 29, 2024 and sell it today you would lose (3,466) from holding Mari Petroleum or give up 4.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mari Petroleum vs. Gul Ahmed Textile
Performance |
Timeline |
Mari Petroleum |
Gul Ahmed Textile |
Mari Petroleum and Gul Ahmed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mari Petroleum and Gul Ahmed
The main advantage of trading using opposite Mari Petroleum and Gul Ahmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Gul Ahmed 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 Gul Ahmed will offset losses from the drop in Gul Ahmed's long position.Mari Petroleum vs. National Foods | Mari Petroleum vs. Ghandhara Automobile | Mari Petroleum vs. IGI Life Insurance | Mari Petroleum vs. Packages |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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