Correlation Between Empire State and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Marathon Petroleum Corp, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Marathon Petroleum.
Diversification Opportunities for Empire State and Marathon Petroleum
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and Marathon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty 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 Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Empire State and Marathon Petroleum
Given the investment horizon of 90 days Empire State is expected to generate 2.67 times less return on investment than Marathon Petroleum. But when comparing it to its historical volatility, Empire State Realty is 1.5 times less risky than Marathon Petroleum. It trades about 0.13 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 13,281 in Marathon Petroleum Corp on September 1, 2024 and sell it today you would earn a total of 1,375 from holding Marathon Petroleum Corp or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Empire State Realty vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Empire State Realty |
| Marathon Petroleum Corp |
Empire State and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Marathon Petroleum
The main advantage of trading using opposite Empire State and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Marathon Petroleum vs. Superior Plus Corp | Marathon Petroleum vs. NMI Holdings | Marathon Petroleum vs. Origin Agritech | Marathon Petroleum vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |