Correlation Between Scottish Mortgage and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Marathon Petroleum Corp, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Marathon Petroleum.
Diversification Opportunities for Scottish Mortgage and Marathon Petroleum
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scottish and Marathon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage 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 Scottish Mortgage 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 Scottish Mortgage 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 Scottish Mortgage i.e., Scottish Mortgage and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Marathon Petroleum
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.74 times more return on investment than Marathon Petroleum. However, Scottish Mortgage Investment is 1.36 times less risky than Marathon Petroleum. It trades about 0.07 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 732.00 in Scottish Mortgage Investment on December 12, 2024 and sell it today you would earn a total of 459.00 from holding Scottish Mortgage Investment or generate 62.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Scottish Mortgage |
| Marathon Petroleum Corp |
Scottish Mortgage and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and Marathon Petroleum
The main advantage of trading using opposite Scottish Mortgage and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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.| Scottish Mortgage vs. UNIVERSAL DISPLAY | ||
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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