Correlation Between Delek Logistics and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Delek Logistics 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 Delek Logistics and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Logistics Partners and Marathon Petroleum Corp, you can compare the effects of market volatilities on Delek Logistics 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 Delek Logistics with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Marathon Petroleum.
Diversification Opportunities for Delek Logistics and Marathon Petroleum
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delek and Marathon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners 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 Delek Logistics 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 Delek Logistics Partners 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 Delek Logistics i.e., Delek Logistics and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Delek Logistics and Marathon Petroleum
Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.59 times more return on investment than Marathon Petroleum. However, Delek Logistics Partners is 1.71 times less risky than Marathon Petroleum. It trades about 0.26 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.06 per unit of risk. If you would invest 3,789 in Delek Logistics Partners on November 1, 2024 and sell it today you would earn a total of 644.00 from holding Delek Logistics Partners or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Delek Logistics Partners |
| Marathon Petroleum Corp |
Delek Logistics and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and Marathon Petroleum
The main advantage of trading using opposite Delek Logistics and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics 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.| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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