Correlation Between Murphy USA and OReilly Automotive
Can any of the company-specific risk be diversified away by investing in both Murphy USA and OReilly Automotive 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 Murphy USA and OReilly Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy USA and OReilly Automotive, you can compare the effects of market volatilities on Murphy USA and OReilly Automotive 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 Murphy USA with a short position of OReilly Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy USA and OReilly Automotive.
Diversification Opportunities for Murphy USA and OReilly Automotive
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Murphy and OReilly is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Murphy USA and OReilly Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OReilly Automotive and Murphy USA 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 Murphy USA are associated (or correlated) with OReilly Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OReilly Automotive has no effect on the direction of Murphy USA i.e., Murphy USA and OReilly Automotive go up and down completely randomly.
Pair Corralation between Murphy USA and OReilly Automotive
Given the investment horizon of 90 days Murphy USA is expected to generate 0.9 times more return on investment than OReilly Automotive. However, Murphy USA is 1.11 times less risky than OReilly Automotive. It trades about 0.36 of its potential returns per unit of risk. OReilly Automotive is currently generating about 0.02 per unit of risk. If you would invest 47,332 in Murphy USA on August 24, 2024 and sell it today you would earn a total of 5,802 from holding Murphy USA or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murphy USA vs. OReilly Automotive
Performance |
| Timeline |
| Murphy USA |
| OReilly Automotive |
Murphy USA and OReilly Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murphy USA and OReilly Automotive
The main advantage of trading using opposite Murphy USA and OReilly Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy USA position performs unexpectedly, OReilly Automotive 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 OReilly Automotive will offset losses from the drop in OReilly Automotive's long position.| Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
| OReilly Automotive vs. AutoZone | OReilly Automotive vs. Best Buy Co | OReilly Automotive vs. Dicks Sporting Goods | OReilly Automotive vs. Advance Auto Parts |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |