Correlation Between Goldman Sachs and Marathon Oil
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Marathon Oil 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 Goldman Sachs and Marathon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and Marathon Oil, you can compare the effects of market volatilities on Goldman Sachs and Marathon Oil 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 Goldman Sachs with a short position of Marathon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Marathon Oil.
Diversification Opportunities for Goldman Sachs and Marathon Oil
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Marathon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Marathon Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Oil and Goldman Sachs 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 The Goldman Sachs are associated (or correlated) with Marathon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Oil has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Marathon Oil go up and down completely randomly.
Pair Corralation between Goldman Sachs and Marathon Oil
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 0.7 times more return on investment than Marathon Oil. However, The Goldman Sachs is 1.43 times less risky than Marathon Oil. It trades about 0.09 of its potential returns per unit of risk. Marathon Oil is currently generating about 0.03 per unit of risk. If you would invest 6,074 in The Goldman Sachs on August 30, 2024 and sell it today you would earn a total of 5,926 from holding The Goldman Sachs or generate 97.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.26% |
| Values | Daily Returns |
The Goldman Sachs vs. Marathon Oil
Performance |
| Timeline |
| Goldman Sachs |
| Marathon Oil |
Goldman Sachs and Marathon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Marathon Oil
The main advantage of trading using opposite Goldman Sachs and Marathon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Marathon Oil 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 Oil will offset losses from the drop in Marathon Oil's long position.| Goldman Sachs vs. Take Two Interactive Software | Goldman Sachs vs. Raytheon Technologies | Goldman Sachs vs. Bemobi Mobile Tech | Goldman Sachs vs. Charter Communications |
| Marathon Oil vs. Petro Rio SA | Marathon Oil vs. Banco BTG Pactual | Marathon Oil vs. Ambipar Participaes e | Marathon Oil vs. Mliuz SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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