Correlation Between VIVA WINE and Marathon Petroleum

Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Marathon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIVA WINE GROUP and Marathon Petroleum Corp, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Marathon Petroleum.

Diversification Opportunities for VIVA WINE and Marathon Petroleum

-0.5

Correlation Coefficient

VIVA WINE  Marathon Petroleum

Very good diversification

The 3 months correlation between VIVA and Marathon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP 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 VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Marathon Petroleum go up and down completely randomly.

Pair Corralation between VIVA WINE and Marathon Petroleum

Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 0.7 times more return on investment than Marathon Petroleum. However, VIVA WINE GROUP is 1.42 times less risky than Marathon Petroleum. It trades about 0.13 of its potential returns per unit of risk. Marathon Petroleum Corp is currently generating about 0.05 per unit of risk. If you would invest  324.00  in VIVA WINE GROUP on December 21, 2024 and sell it today you would earn a total of  42.00  from holding VIVA WINE GROUP or generate 12.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VIVA WINE GROUP  vs.  Marathon Petroleum Corp

VIVA WINE GROUP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VIVA WINE GROUP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, VIVA WINE reported solid returns over the last few months and may actually be approaching a breakup point.

Marathon Petroleum Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Petroleum Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Marathon Petroleum may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VIVA WINE and Marathon Petroleum

The main advantage of trading using opposite VIVA WINE and Marathon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.

The idea behind VIVA WINE GROUP and Marathon Petroleum Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..