Correlation Between Marathon Petroleum and Triunfo Participaes

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

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

Diversification Opportunities for Marathon Petroleum and Triunfo Participaes

-0.61

Correlation Coefficient

Marathon Petroleum  Triunfo Participaes

Excellent diversification

The 3 months correlation between Marathon and Triunfo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum and Triunfo Participaes e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triunfo Participaes 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 Triunfo Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triunfo Participaes has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Triunfo Participaes go up and down completely randomly.

Pair Corralation between Marathon Petroleum and Triunfo Participaes

Assuming the 90 days trading horizon Marathon Petroleum is expected to under-perform the Triunfo Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Marathon Petroleum is 2.48 times less risky than Triunfo Participaes. The stock trades about -0.08 of its potential returns per unit of risk. The Triunfo Participaes e is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  525.00  in Triunfo Participaes e on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Triunfo Participaes e or generate 0.0% return on investment over 90 days.

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

Marathon Petroleum  vs.  Triunfo Participaes e

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Triunfo Participaes

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triunfo Participaes e are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Triunfo Participaes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Marathon Petroleum and Triunfo Participaes

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

The idea behind Marathon Petroleum and Triunfo Participaes e 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.