Correlation Between Marathon Petroleum and Bazan Oil
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Bazan 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 Marathon Petroleum and Bazan Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marathon Petroleum Corp and Bazan Oil Refineries, you can compare the effects of market volatilities on Marathon Petroleum and Bazan 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 Marathon Petroleum with a short position of Bazan Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Bazan Oil.
Diversification Opportunities for Marathon Petroleum and Bazan Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marathon and Bazan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Bazan Oil Refineries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bazan Oil Refineries and Marathon Petroleum 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 Marathon Petroleum Corp are associated (or correlated) with Bazan Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bazan Oil Refineries has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Bazan Oil go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Bazan Oil
If you would invest 15,224 in Marathon Petroleum Corp on January 19, 2024 and sell it today you would earn a total of 5,022 from holding Marathon Petroleum Corp or generate 32.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.61% |
| Values | Daily Returns |
Marathon Petroleum Corp vs. Bazan Oil Refineries
Performance |
| Timeline |
| Marathon Petroleum Corp |
| Bazan Oil Refineries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marathon Petroleum and Bazan Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marathon Petroleum and Bazan Oil
The main advantage of trading using opposite Marathon Petroleum and Bazan Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Bazan 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 Bazan Oil will offset losses from the drop in Bazan Oil's long position.| Marathon Petroleum vs. Clean Energy Fuels | Marathon Petroleum vs. Icahn Enterprises LP | Marathon Petroleum vs. PBF Energy | Marathon Petroleum vs. Delek Logistics Partners |
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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..
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