Correlation Between Sunoco LP and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Sunoco LP 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 Sunoco LP and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and Marathon Petroleum Corp, you can compare the effects of market volatilities on Sunoco LP 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 Sunoco LP with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and Marathon Petroleum.
Diversification Opportunities for Sunoco LP and Marathon Petroleum
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunoco and Marathon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP and Marathon Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum Corp and Sunoco LP 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 Sunoco LP 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 Corp has no effect on the direction of Sunoco LP i.e., Sunoco LP and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Sunoco LP and Marathon Petroleum
Considering the 90-day investment horizon Sunoco LP is expected to generate 0.81 times more return on investment than Marathon Petroleum. However, Sunoco LP is 1.23 times less risky than Marathon Petroleum. It trades about 0.18 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.06 per unit of risk. If you would invest 5,007 in Sunoco LP on November 1, 2024 and sell it today you would earn a total of 793.00 from holding Sunoco LP or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. Marathon Petroleum Corp
Performance |
| Timeline |
| Sunoco LP |
| Marathon Petroleum Corp |
Sunoco LP and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and Marathon Petroleum
The main advantage of trading using opposite Sunoco LP and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP 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.| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
| Marathon Petroleum vs. Phillips 66 | Marathon Petroleum vs. HF Sinclair Corp | Marathon Petroleum vs. PBF Energy | Marathon Petroleum vs. Sunoco LP |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |