Correlation Between Mangels Industrial and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial 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 Mangels Industrial and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mangels Industrial SA and Marathon Petroleum, you can compare the effects of market volatilities on Mangels Industrial 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 Mangels Industrial with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Marathon Petroleum.
Diversification Opportunities for Mangels Industrial and Marathon Petroleum
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mangels and Marathon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Marathon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum and Mangels Industrial 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 Mangels Industrial SA 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 has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Mangels Industrial and Marathon Petroleum
Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Marathon Petroleum. In addition to that, Mangels Industrial is 1.54 times more volatile than Marathon Petroleum. It trades about -0.02 of its total potential returns per unit of risk. Marathon Petroleum is currently generating about 0.07 per unit of volatility. If you would invest 56,800 in Marathon Petroleum on September 2, 2024 and sell it today you would earn a total of 34,700 from holding Marathon Petroleum or generate 61.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 72.46% |
| Values | Daily Returns |
Mangels Industrial SA vs. Marathon Petroleum
Performance |
| Timeline |
| Mangels Industrial |
| Marathon Petroleum |
Mangels Industrial and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and Marathon Petroleum
The main advantage of trading using opposite Mangels Industrial and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial 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.| Mangels Industrial vs. Inepar SA Indstria | Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Rossi Residencial SA | Mangels Industrial vs. Fras le SA |
| Marathon Petroleum vs. Phillips 66 | Marathon Petroleum vs. Cosan SA | Marathon Petroleum vs. Refinaria de Petrleos |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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