Correlation Between Office Properties and MARATHON

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

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

Diversification Opportunities for Office Properties and MARATHON

-0.21

Correlation Coefficient

Office Properties  MARATHON

Very good diversification

The 3 months correlation between Office and MARATHON is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income 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 Office Properties 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 Office Properties Income 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 Office Properties i.e., Office Properties and MARATHON go up and down completely randomly.

Pair Corralation between Office Properties and MARATHON

Assuming the 90 days horizon Office Properties Income is expected to under-perform the MARATHON. In addition to that, Office Properties is 1.82 times more volatile than MARATHON PETE P. It trades about -0.05 of its total potential returns per unit of risk. MARATHON PETE P is currently generating about 0.02 per unit of volatility. If you would invest  10,513  in MARATHON PETE P on October 26, 2024 and sell it today you would earn a total of  174.00  from holding MARATHON PETE P or generate 1.66% return on investment over 90 days.

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

Office Properties Income  vs.  MARATHON PETE P

Office Properties Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Office Properties Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

MARATHON PETE P

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MARATHON PETE P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MARATHON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Office Properties and MARATHON

The main advantage of trading using opposite Office Properties and MARATHON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties 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 Office Properties Income 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.