Correlation Between Marathon Petroleum and Thai Oil
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Thai Oil 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 Thai Oil 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 Thai Oil Public, you can compare the effects of market volatilities on Marathon Petroleum and Thai Oil 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 Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Thai Oil.
Diversification Opportunities for Marathon Petroleum and Thai Oil
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marathon and Thai is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public 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 Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Thai Oil go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Thai Oil
Assuming the 90 days horizon Marathon Petroleum Corp is expected to generate 0.7 times more return on investment than Thai Oil. However, Marathon Petroleum Corp is 1.42 times less risky than Thai Oil. It trades about 0.04 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.08 per unit of risk. If you would invest 14,219 in Marathon Petroleum Corp on September 12, 2024 and sell it today you would earn a total of 183.00 from holding Marathon Petroleum Corp or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. Thai Oil Public
Performance |
| Timeline |
| Marathon Petroleum Corp |
| Thai Oil Public |
Marathon Petroleum and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and Thai Oil
The main advantage of trading using opposite Marathon Petroleum and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Thai Oil 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 Thai Oil will offset losses from the drop in Thai Oil's long position.| Marathon Petroleum vs. Iridium Communications | Marathon Petroleum vs. CVS Health | Marathon Petroleum vs. CHINA TELECOM H | Marathon Petroleum vs. FEMALE HEALTH |
| Thai Oil vs. Superior Plus Corp | Thai Oil vs. SIVERS SEMICONDUCTORS AB | Thai Oil vs. Norsk Hydro ASA | Thai Oil vs. Reliance Steel Aluminum |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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