Correlation Between Visa and Marathon Petroleum
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Marathon Petroleum, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Marathon Petroleum.
Diversification Opportunities for Visa and Marathon Petroleum
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Visa and Marathon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Marathon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum and Visa 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 Visa Class A 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 Visa i.e., Visa and Marathon Petroleum go up and down completely randomly.
Pair Corralation between Visa and Marathon Petroleum
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.52 times more return on investment than Marathon Petroleum. However, Visa Class A is 1.93 times less risky than Marathon Petroleum. It trades about 0.4 of its potential returns per unit of risk. Marathon Petroleum is currently generating about 0.13 per unit of risk. If you would invest 28,134 in Visa Class A on August 30, 2024 and sell it today you would earn a total of 3,336 from holding Visa Class A or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Marathon Petroleum
Performance |
| Timeline |
| Visa Class A |
| Marathon Petroleum |
Visa and Marathon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Marathon Petroleum
The main advantage of trading using opposite Visa and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Marathon Petroleum vs. Jacquet Metal Service | Marathon Petroleum vs. Zijin Mining Group | Marathon Petroleum vs. MCEWEN MINING INC | Marathon Petroleum vs. SALESFORCE INC CDR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |