Correlation Between Blue Dolphin and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Blue Dolphin 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 Blue Dolphin and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Dolphin Energy and Marathon Petroleum Corp, you can compare the effects of market volatilities on Blue Dolphin 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 Blue Dolphin with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Dolphin and Marathon Petroleum.
Diversification Opportunities for Blue Dolphin and Marathon Petroleum
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blue and Marathon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Blue Dolphin Energy 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 Blue Dolphin 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 Blue Dolphin Energy 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 Blue Dolphin i.e., Blue Dolphin and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Blue Dolphin and Marathon Petroleum
Given the investment horizon of 90 days Blue Dolphin Energy is expected to generate 4.15 times more return on investment than Marathon Petroleum. However, Blue Dolphin is 4.15 times more volatile than Marathon Petroleum Corp. It trades about 0.17 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.05 per unit of risk. If you would invest 123.00 in Blue Dolphin Energy on August 27, 2024 and sell it today you would earn a total of 483.00 from holding Blue Dolphin Energy or generate 392.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Blue Dolphin Energy vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Blue Dolphin Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marathon Petroleum Corp |
Blue Dolphin and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Dolphin and Marathon Petroleum
The main advantage of trading using opposite Blue Dolphin and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Dolphin 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.| Blue Dolphin vs. Aemetis | Blue Dolphin vs. PBF Energy | Blue Dolphin vs. Clean Energy Fuels | Blue Dolphin vs. Par Pacific 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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