Correlation Between METISA Metalrgica and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and Marathon Petroleum 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 METISA Metalrgica and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METISA Metalrgica Timboense and Marathon Petroleum, you can compare the effects of market volatilities on METISA Metalrgica and Marathon Petroleum 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 METISA Metalrgica with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Marathon Petroleum.
Diversification Opportunities for METISA Metalrgica and Marathon Petroleum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between METISA and Marathon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Marathon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum and METISA Metalrgica 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 METISA Metalrgica Timboense are associated (or correlated) with Marathon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Petroleum has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Marathon Petroleum go up and down completely randomly.
Pair Corralation between METISA Metalrgica and Marathon Petroleum
Assuming the 90 days trading horizon METISA Metalrgica is expected to generate 4.62 times less return on investment than Marathon Petroleum. In addition to that, METISA Metalrgica is 1.16 times more volatile than Marathon Petroleum. It trades about 0.01 of its total potential returns per unit of risk. Marathon Petroleum is currently generating about 0.07 per unit of volatility. If you would invest 56,800 in Marathon Petroleum on September 2, 2024 and sell it today you would earn a total of 34,700 from holding Marathon Petroleum or generate 61.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 72.46% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. Marathon Petroleum
Performance |
| Timeline |
| METISA Metalrgica |
| Marathon Petroleum |
METISA Metalrgica and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and Marathon Petroleum
The main advantage of trading using opposite METISA Metalrgica and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica position performs unexpectedly, Marathon Petroleum 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 Marathon Petroleum will offset losses from the drop in Marathon Petroleum's long position.| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi SA |
| Marathon Petroleum vs. Phillips 66 | Marathon Petroleum vs. Cosan SA | Marathon Petroleum vs. Refinaria de Petrleos |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |