Correlation Between Eneos Holdings and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Eneos Holdings 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 Eneos Holdings and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eneos Holdings ADR and Marathon Petroleum Corp, you can compare the effects of market volatilities on Eneos Holdings 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 Eneos Holdings with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eneos Holdings and Marathon Petroleum.
Diversification Opportunities for Eneos Holdings and Marathon Petroleum
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eneos and Marathon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eneos Holdings ADR 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 Eneos Holdings 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 Eneos Holdings ADR 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 Eneos Holdings i.e., Eneos Holdings and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Eneos Holdings and Marathon Petroleum
Assuming the 90 days horizon Eneos Holdings is expected to generate 1.37 times less return on investment than Marathon Petroleum. In addition to that, Eneos Holdings is 4.44 times more volatile than Marathon Petroleum Corp. It trades about 0.05 of its total potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.32 per unit of volatility. If you would invest 14,411 in Marathon Petroleum Corp on September 3, 2024 and sell it today you would earn a total of 1,330 from holding Marathon Petroleum Corp or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eneos Holdings ADR vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Eneos Holdings ADR |
| Marathon Petroleum Corp |
Eneos Holdings and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eneos Holdings and Marathon Petroleum
The main advantage of trading using opposite Eneos Holdings and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eneos Holdings 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.| Eneos Holdings vs. Idemitsu Kosan CoLtd | Eneos Holdings vs. HF Sinclair Corp | Eneos Holdings vs. Idemitsu Kosan Co | Eneos Holdings vs. PBF Energy |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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