Correlation Between Mari Petroleum and Habib Insurance

Can any of the company-specific risk be diversified away by investing in both Mari Petroleum and Habib 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 Habib 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 Habib Insurance, you can compare the effects of market volatilities on Mari Petroleum and Habib 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 Habib Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Habib Insurance.

Diversification Opportunities for Mari Petroleum and Habib Insurance

-0.04

Correlation Coefficient

Mari Petroleum  Habib Insurance

Good diversification

The 3 months correlation between Mari and Habib is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Habib Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib 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 Habib Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Insurance has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Habib Insurance go up and down completely randomly.

Pair Corralation between Mari Petroleum and Habib Insurance

Assuming the 90 days trading horizon Mari Petroleum is expected to generate 3.04 times more return on investment than Habib Insurance. However, Mari Petroleum is 3.04 times more volatile than Habib Insurance. It trades about 0.37 of its potential returns per unit of risk. Habib Insurance is currently generating about 0.05 per unit of risk. If you would invest  54,856  in Mari Petroleum on December 30, 2024 and sell it today you would earn a total of  13,560  from holding Mari Petroleum or generate 24.72% return on investment over 90 days.

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

Mari Petroleum  vs.  Habib Insurance

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.

Habib Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Habib Insurance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Habib Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mari Petroleum and Habib Insurance

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

The idea behind Mari Petroleum and Habib Insurance 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.