Correlation Between Marathon Petroleum and HF SINCLAIR
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and HF SINCLAIR 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 HF SINCLAIR 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 HF SINCLAIR P, you can compare the effects of market volatilities on Marathon Petroleum and HF SINCLAIR 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 HF SINCLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and HF SINCLAIR.
Diversification Opportunities for Marathon Petroleum and HF SINCLAIR
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marathon and HL80 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P 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 HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and HF SINCLAIR go up and down completely randomly.
Pair Corralation between Marathon Petroleum and HF SINCLAIR
Assuming the 90 days horizon Marathon Petroleum Corp is expected to generate 0.99 times more return on investment than HF SINCLAIR. However, Marathon Petroleum Corp is 1.01 times less risky than HF SINCLAIR. It trades about 0.05 of its potential returns per unit of risk. HF SINCLAIR P is currently generating about 0.0 per unit of risk. If you would invest 9,834 in Marathon Petroleum Corp on September 3, 2024 and sell it today you would earn a total of 4,822 from holding Marathon Petroleum Corp or generate 49.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. HF SINCLAIR P
Performance |
| Timeline |
| Marathon Petroleum Corp |
| HF SINCLAIR P |
Marathon Petroleum and HF SINCLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and HF SINCLAIR
The main advantage of trading using opposite Marathon Petroleum and HF SINCLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, HF SINCLAIR 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 HF SINCLAIR will offset losses from the drop in HF SINCLAIR's long position.| Marathon Petroleum vs. Automatic Data Processing | Marathon Petroleum vs. NURAN WIRELESS INC | Marathon Petroleum vs. Cogent Communications Holdings | Marathon Petroleum vs. Datang International Power |
| HF SINCLAIR vs. Marathon Petroleum Corp | HF SINCLAIR vs. Neste Oyj | HF SINCLAIR vs. ENEOS Holdings | HF SINCLAIR vs. PTT OILRETBUS FOR BA10 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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