Correlation Between Companhia Energtica and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica 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 Companhia Energtica and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energtica de and Marathon Petroleum, you can compare the effects of market volatilities on Companhia Energtica 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 Companhia Energtica with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Marathon Petroleum.
Diversification Opportunities for Companhia Energtica and Marathon Petroleum
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Marathon is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Marathon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum and Companhia Energtica 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 Companhia Energtica de 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 has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Companhia Energtica and Marathon Petroleum
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 2.07 times more return on investment than Marathon Petroleum. However, Companhia Energtica is 2.07 times more volatile than Marathon Petroleum. It trades about 0.06 of its potential returns per unit of risk. Marathon Petroleum is currently generating about 0.06 per unit of risk. If you would invest 831.00 in Companhia Energtica de on August 27, 2024 and sell it today you would earn a total of 861.00 from holding Companhia Energtica de or generate 103.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.58% |
| Values | Daily Returns |
Companhia Energtica de vs. Marathon Petroleum
Performance |
| Timeline |
| Companhia Energtica |
| Marathon Petroleum |
Companhia Energtica and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Marathon Petroleum
The main advantage of trading using opposite Companhia Energtica and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica 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.| Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Empresa Metropolitana de | Companhia Energtica vs. Companhiade Eletricidade do |
| Marathon Petroleum vs. Tres Tentos Agroindustrial | Marathon Petroleum vs. Metalrgica Riosulense SA | Marathon Petroleum vs. United States Steel | Marathon Petroleum vs. Iron Mountain Incorporated |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world |