Correlation Between Mosaic and MARATHON

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

By analyzing existing cross correlation between The Mosaic and MARATHON PETE P, you can compare the effects of market volatilities on Mosaic and MARATHON 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 Mosaic with a short position of MARATHON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and MARATHON.

Diversification Opportunities for Mosaic and MARATHON

0.33

Correlation Coefficient

Mosaic  MARATHON

Weak diversification

The 3 months correlation between Mosaic and MARATHON is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and MARATHON PETE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARATHON PETE P and Mosaic 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 The Mosaic are associated (or correlated) with MARATHON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARATHON PETE P has no effect on the direction of Mosaic i.e., Mosaic and MARATHON go up and down completely randomly.

Pair Corralation between Mosaic and MARATHON

Considering the 90-day investment horizon The Mosaic is expected to under-perform the MARATHON. In addition to that, Mosaic is 1.32 times more volatile than MARATHON PETE P. It trades about -0.11 of its total potential returns per unit of risk. MARATHON PETE P is currently generating about 0.04 per unit of volatility. If you would invest  9,726  in MARATHON PETE P on October 11, 2024 and sell it today you would earn a total of  166.00  from holding MARATHON PETE P or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.49%
Values	Daily Returns

The Mosaic  vs.  MARATHON PETE P

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Mosaic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mosaic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

MARATHON PETE P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARATHON PETE P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARATHON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mosaic and MARATHON

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

The idea behind The Mosaic and MARATHON PETE P 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.