Correlation Between Marathon Petroleum and Datadog,

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

By analyzing existing cross correlation between Marathon Petroleum and Datadog,, you can compare the effects of market volatilities on Marathon Petroleum and Datadog, 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 Datadog,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Datadog,.

Diversification Opportunities for Marathon Petroleum and Datadog,

-0.29

Correlation Coefficient

Marathon Petroleum  Datadog,

Very good diversification

The 3 months correlation between Marathon and Datadog, is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum and Datadog, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datadog, 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 are associated (or correlated) with Datadog,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datadog, has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Datadog, go up and down completely randomly.

Pair Corralation between Marathon Petroleum and Datadog,

Assuming the 90 days trading horizon Marathon Petroleum is expected to under-perform the Datadog,. But the stock apears to be less risky and, when comparing its historical volatility, Marathon Petroleum is 2.19 times less risky than Datadog,. The stock trades about -0.31 of its potential returns per unit of risk. The Datadog, is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  9,432  in Datadog, on October 4, 2024 and sell it today you would lose (543.00) from holding Datadog, or give up 5.76% of portfolio value over 90 days.

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

Marathon Petroleum  vs.  Datadog,

Marathon Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marathon Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Datadog,

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datadog, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Datadog, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marathon Petroleum and Datadog,

The main advantage of trading using opposite Marathon Petroleum and Datadog, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Petroleum position performs unexpectedly, Datadog, 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 Datadog, will offset losses from the drop in Datadog,'s long position.

The idea behind Marathon Petroleum and Datadog, 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 CEOs Directory module to screen CEOs from public companies around the world.