Correlation Between Vulcan Materials and Marathon Oil
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials and Marathon Oil 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 Vulcan Materials and Marathon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials Co and Marathon Oil Corp, you can compare the effects of market volatilities on Vulcan Materials and Marathon Oil 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 Vulcan Materials with a short position of Marathon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and Marathon Oil.
Diversification Opportunities for Vulcan Materials and Marathon Oil
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vulcan and Marathon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials Co and Marathon Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Oil Corp and Vulcan Materials 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 Vulcan Materials Co are associated (or correlated) with Marathon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Oil Corp has no effect on the direction of Vulcan Materials i.e., Vulcan Materials and Marathon Oil go up and down completely randomly.
Pair Corralation between Vulcan Materials and Marathon Oil
Assuming the 90 days trading horizon Vulcan Materials Co is expected to generate 0.9 times more return on investment than Marathon Oil. However, Vulcan Materials Co is 1.11 times less risky than Marathon Oil. It trades about 0.08 of its potential returns per unit of risk. Marathon Oil Corp is currently generating about 0.04 per unit of risk. If you would invest 20,897 in Vulcan Materials Co on September 14, 2024 and sell it today you would earn a total of 6,937 from holding Vulcan Materials Co or generate 33.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.68% |
| Values | Daily Returns |
Vulcan Materials Co vs. Marathon Oil Corp
Performance |
| Timeline |
| Vulcan Materials |
| Marathon Oil Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Vulcan Materials and Marathon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and Marathon Oil
The main advantage of trading using opposite Vulcan Materials and Marathon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials position performs unexpectedly, Marathon Oil 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 Marathon Oil will offset losses from the drop in Marathon Oil's long position.| Vulcan Materials vs. Albion Technology General | Vulcan Materials vs. Gamma Communications PLC | Vulcan Materials vs. SMA Solar Technology | Vulcan Materials vs. DXC Technology Co |
| Marathon Oil vs. Broadridge Financial Solutions | Marathon Oil vs. Vulcan Materials Co | Marathon Oil vs. Morgan Advanced Materials | Marathon Oil vs. Taiwan Semiconductor Manufacturing |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |