Correlation Between Gladstone Investment and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Marathon 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 Gladstone Investment and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Marathon Petroleum Corp, you can compare the effects of market volatilities on Gladstone Investment and Marathon 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 Gladstone Investment with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Marathon Petroleum.
Diversification Opportunities for Gladstone Investment and Marathon Petroleum
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Marathon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Marathon Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum Corp and Gladstone Investment 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 Gladstone Investment are associated (or correlated) with Marathon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Petroleum Corp has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Gladstone Investment and Marathon Petroleum
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.74 times more return on investment than Marathon Petroleum. However, Gladstone Investment is 1.36 times less risky than Marathon Petroleum. It trades about 0.05 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.02 per unit of risk. If you would invest 887.00 in Gladstone Investment on December 12, 2024 and sell it today you would earn a total of 363.00 from holding Gladstone Investment or generate 40.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Gladstone Investment |
| Marathon Petroleum Corp |
Gladstone Investment and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Marathon Petroleum
The main advantage of trading using opposite Gladstone Investment and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Marathon 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 Marathon Petroleum will offset losses from the drop in Marathon Petroleum's long position.| Gladstone Investment vs. Transport International Holdings | ||
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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 Stocks Directory module to find actively traded stocks across global markets.
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