Correlation Between Marathon Petroleum and Deutsche Real
Can any of the company-specific risk be diversified away by investing in both Marathon Petroleum and Deutsche Real 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 Deutsche Real 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 Deutsche Real Assets, you can compare the effects of market volatilities on Marathon Petroleum and Deutsche Real 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 Deutsche Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Deutsche Real.
Diversification Opportunities for Marathon Petroleum and Deutsche Real
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marathon and Deutsche is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and Deutsche Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Real Assets 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 Deutsche Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Real Assets has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Deutsche Real go up and down completely randomly.
Pair Corralation between Marathon Petroleum and Deutsche Real
Considering the 90-day investment horizon Marathon Petroleum Corp is expected to generate 2.42 times more return on investment than Deutsche Real. However, Marathon Petroleum is 2.42 times more volatile than Deutsche Real Assets. It trades about 0.01 of its potential returns per unit of risk. Deutsche Real Assets is currently generating about -0.1 per unit of risk. If you would invest 19,983 in Marathon Petroleum Corp on January 25, 2024 and sell it today you would lose (18.00) from holding Marathon Petroleum Corp or give up 0.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Marathon Petroleum Corp vs. Deutsche Real Assets
Performance |
Timeline |
Marathon Petroleum Corp |
Deutsche Real Assets |
Marathon Petroleum and Deutsche Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marathon Petroleum and Deutsche Real
The main advantage of trading using opposite Marathon Petroleum and Deutsche Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Deutsche Real 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 Deutsche Real will offset losses from the drop in Deutsche Real's long position.Marathon Petroleum vs. Delek Logistics Partners | Marathon Petroleum vs. Crossamerica Partners LP | Marathon Petroleum vs. Sunoco LP |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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