Correlation Between Synthomer Plc and Marathon Oil
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Marathon 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 Synthomer Plc and Marathon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Marathon Oil Corp, you can compare the effects of market volatilities on Synthomer Plc and Marathon 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 Synthomer Plc with a short position of Marathon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Marathon Oil.
Diversification Opportunities for Synthomer Plc and Marathon Oil
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synthomer and Marathon is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Marathon Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Oil Corp and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Marathon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Oil Corp has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Marathon Oil go up and down completely randomly.
Pair Corralation between Synthomer Plc and Marathon Oil
Assuming the 90 days trading horizon Synthomer plc is expected to generate 3.19 times more return on investment than Marathon Oil. However, Synthomer Plc is 3.19 times more volatile than Marathon Oil Corp. It trades about 0.07 of its potential returns per unit of risk. Marathon Oil Corp is currently generating about 0.1 per unit of risk. If you would invest 16,860 in Synthomer plc on September 14, 2024 and sell it today you would earn a total of 640.00 from holding Synthomer plc or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.36% |
| Values | Daily Returns |
Synthomer plc vs. Marathon Oil Corp
Performance |
| Timeline |
| Synthomer plc |
| Marathon Oil Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Synthomer Plc and Marathon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Marathon Oil
The main advantage of trading using opposite Synthomer Plc and Marathon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Marathon 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 Marathon Oil will offset losses from the drop in Marathon Oil's long position.| Synthomer Plc vs. CAP LEASE AVIATION | Synthomer Plc vs. Melia Hotels | Synthomer Plc vs. AMG Advanced Metallurgical | Synthomer Plc vs. METALL ZUG AG |
| Marathon Oil vs. Broadridge Financial Solutions | Marathon Oil vs. Vulcan Materials Co | Marathon Oil vs. Morgan Advanced Materials | Marathon Oil vs. Taiwan Semiconductor Manufacturing |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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