Correlation Between Mari Petroleum and WorldCall Telecom

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

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

Diversification Opportunities for Mari Petroleum and WorldCall Telecom

0.3

Correlation Coefficient

Mari Petroleum  WorldCall Telecom

Weak diversification

The 3 months correlation between Mari and WorldCall is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and WorldCall Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WorldCall Telecom 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 WorldCall Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WorldCall Telecom has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and WorldCall Telecom go up and down completely randomly.

Pair Corralation between Mari Petroleum and WorldCall Telecom

Assuming the 90 days trading horizon Mari Petroleum is expected to generate 1.36 times more return on investment than WorldCall Telecom. However, Mari Petroleum is 1.36 times more volatile than WorldCall Telecom. It trades about -0.01 of its potential returns per unit of risk. WorldCall Telecom is currently generating about -0.2 per unit of risk. If you would invest  71,961  in Mari Petroleum on December 31, 2024 and sell it today you would lose (3,545) from holding Mari Petroleum or give up 4.93% of portfolio value over 90 days.

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

Mari Petroleum  vs.  WorldCall Telecom

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 current stock price disturbance, may contribute to short-term losses for the investors.

WorldCall Telecom

Risk-Adjusted Performance

Very Weak

Over the last 90 days WorldCall Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mari Petroleum and WorldCall Telecom

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

The idea behind Mari Petroleum and WorldCall Telecom 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.