Correlation Between National Retail and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Marathon Petroleum Corp, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Marathon Petroleum.
Diversification Opportunities for National Retail and Marathon Petroleum
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Marathon is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties 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 National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and Marathon Petroleum go up and down completely randomly.
Pair Corralation between National Retail and Marathon Petroleum
Assuming the 90 days trading horizon National Retail Properties is expected to under-perform the Marathon Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, National Retail Properties is 1.78 times less risky than Marathon Petroleum. The stock trades about -0.17 of its potential returns per unit of risk. The Marathon Petroleum Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 14,219 in Marathon Petroleum Corp on October 11, 2024 and sell it today you would lose (821.00) from holding Marathon Petroleum Corp or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.44% |
| Values | Daily Returns |
National Retail Properties vs. Marathon Petroleum Corp
Performance |
| Timeline |
| National Retail Prop |
| Marathon Petroleum Corp |
National Retail and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Marathon Petroleum
The main advantage of trading using opposite National Retail and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. ECHO INVESTMENT ZY | National Retail vs. Cardinal Health | National Retail vs. Phibro Animal Health | National Retail vs. US Physical Therapy |
| Marathon Petroleum vs. Guidewire Software | Marathon Petroleum vs. Luckin Coffee | Marathon Petroleum vs. National Retail Properties | Marathon Petroleum vs. FAST RETAIL ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |