Correlation Between Marathon Petroleum and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Delek Logistics 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 Logistics 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 Logistics Partners, you can compare the effects of market volatilities on Marathon Petroleum and Delek Logistics 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 Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Delek Logistics.
Diversification Opportunities for Marathon Petroleum and Delek Logistics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marathon and Delek is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Delek Logistics go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Delek Logistics
Considering the 90-day investment horizon Marathon Petroleum is expected to generate 2.63 times less return on investment than Delek Logistics. In addition to that, Marathon Petroleum is 1.71 times more volatile than Delek Logistics Partners. It trades about 0.06 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.26 per unit of volatility. If you would invest 3,789 in Delek Logistics Partners on November 1, 2024 and sell it today you would earn a total of 644.00 from holding Delek Logistics Partners or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. Delek Logistics Partners
Performance |
| Timeline |
| Marathon Petroleum Corp |
| Delek Logistics Partners |
Marathon Petroleum and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and Delek Logistics
The main advantage of trading using opposite Marathon Petroleum and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Delek Logistics 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 Logistics will offset losses from the drop in Delek Logistics' long position.| Marathon Petroleum vs. Phillips 66 | Marathon Petroleum vs. HF Sinclair Corp | Marathon Petroleum vs. PBF Energy | Marathon Petroleum vs. Sunoco LP |
| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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