Correlation Between Marathon Petroleum and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Clean 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 Clean 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 Clean Energy Fuels, you can compare the effects of market volatilities on Marathon Petroleum and Clean 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Clean Energy.
Diversification Opportunities for Marathon Petroleum and Clean Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marathon and Clean is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Clean Energy go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Clean Energy
If you would invest 279.00 in Clean Energy Fuels on November 4, 2024 and sell it today you would earn a total of 38.00 from holding Clean Energy Fuels or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. Clean Energy Fuels
Performance |
| Timeline |
| Marathon Petroleum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Clean Energy Fuels |
Marathon Petroleum and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and Clean Energy
The main advantage of trading using opposite Marathon Petroleum and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Clean 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Marathon Petroleum vs. WT OFFSHORE | Marathon Petroleum vs. CDL INVESTMENT | Marathon Petroleum vs. Gladstone Investment | Marathon Petroleum vs. Scottish Mortgage Investment |
| Clean Energy vs. DETALION GAMES SA | Clean Energy vs. Teradata Corp | Clean Energy vs. GameStop Corp | Clean Energy vs. Media and Games |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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