Correlation Between Virtus Investment and Marathon Petroleum

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

By analyzing existing cross correlation between Virtus Investment Partners and Marathon Petroleum Corp, you can compare the effects of market volatilities on Virtus Investment and Marathon Petroleum 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 Virtus Investment with a short position of Marathon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Marathon Petroleum.

Diversification Opportunities for Virtus Investment and Marathon Petroleum

0.24

Correlation Coefficient

Virtus Investment  Marathon Petroleum

Modest diversification

The 3 months correlation between Virtus and Marathon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and Marathon Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marathon Petroleum Corp and Virtus Investment 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 Virtus Investment Partners are associated (or correlated) with Marathon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marathon Petroleum Corp has no effect on the direction of Virtus Investment i.e., Virtus Investment and Marathon Petroleum go up and down completely randomly.

Pair Corralation between Virtus Investment and Marathon Petroleum

Assuming the 90 days horizon Virtus Investment Partners is expected to under-perform the Marathon Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Virtus Investment Partners is 1.03 times less risky than Marathon Petroleum. The stock trades about -0.15 of its potential returns per unit of risk. The Marathon Petroleum Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12,665  in Marathon Petroleum Corp on December 22, 2024 and sell it today you would earn a total of  1,245  from holding Marathon Petroleum Corp or generate 9.83% return on investment over 90 days.

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

Virtus Investment Partners  vs.  Marathon Petroleum Corp

Virtus Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Investment Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marathon Petroleum Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Petroleum Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Marathon Petroleum may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Virtus Investment and Marathon Petroleum

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

The idea behind Virtus Investment Partners and Marathon Petroleum Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.