Correlation Between Murphy USA and Arko Corp
Can any of the company-specific risk be diversified away by investing in both Murphy USA and Arko Corp 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 Murphy USA and Arko Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy USA and Arko Corp, you can compare the effects of market volatilities on Murphy USA and Arko Corp 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 Murphy USA with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy USA and Arko Corp.
Diversification Opportunities for Murphy USA and Arko Corp
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Murphy and Arko is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Murphy USA and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Murphy USA 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 Murphy USA are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Murphy USA i.e., Murphy USA and Arko Corp go up and down completely randomly.
Pair Corralation between Murphy USA and Arko Corp
Given the investment horizon of 90 days Murphy USA is expected to generate 19.44 times less return on investment than Arko Corp. But when comparing it to its historical volatility, Murphy USA is 34.58 times less risky than Arko Corp. It trades about 0.09 of its potential returns per unit of risk. Arko Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Arko Corp on October 5, 2024 and sell it today you would lose (116.00) from holding Arko Corp or give up 72.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 81.38% |
Values | Daily Returns |
Murphy USA vs. Arko Corp
Performance |
Timeline |
Murphy USA |
Arko Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Murphy USA and Arko Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Murphy USA and Arko Corp
The main advantage of trading using opposite Murphy USA and Arko Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy USA position performs unexpectedly, Arko Corp 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 Arko Corp will offset losses from the drop in Arko Corp's long position.Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
Arko Corp vs. Arko Corp | Arko Corp vs. Advantage Solutions | Arko Corp vs. CannBioRx Life Sciences | Arko Corp vs. GCM Grosvenor |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Stocks Directory Find actively traded stocks across global markets | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Commodity Directory Find actively traded commodities issued by global exchanges |