Correlation Between Marathon Petroleum and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Delek Energy 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 Marathon Petroleum and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marathon Petroleum Corp and Delek Energy, you can compare the effects of market volatilities on Marathon Petroleum and Delek Energy 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 Marathon Petroleum with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Delek Energy.
Diversification Opportunities for Marathon Petroleum and Delek Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marathon and Delek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Marathon Petroleum 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 Marathon Petroleum Corp are associated (or correlated) with Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Delek Energy go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Delek Energy
Considering the 90-day investment horizon Marathon Petroleum is expected to generate 6.05 times less return on investment than Delek Energy. But when comparing it to its historical volatility, Marathon Petroleum Corp is 1.72 times less risky than Delek Energy. It trades about 0.04 of its potential returns per unit of risk. Delek Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,689 in Delek Energy on August 23, 2024 and sell it today you would earn a total of 150.00 from holding Delek Energy or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. Delek Energy
Performance |
| Timeline |
| Marathon Petroleum Corp |
| Delek Energy |
Marathon Petroleum and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and Delek Energy
The main advantage of trading using opposite Marathon Petroleum and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Delek Energy 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 Delek Energy will offset losses from the drop in Delek Energy's long position.| Marathon Petroleum vs. Phillips 66 | Marathon Petroleum vs. HF Sinclair Corp | Marathon Petroleum vs. PBF Energy | Marathon Petroleum vs. Sunoco LP |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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