Correlation Between Marathon Oil and Cardano

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Can any of the company-specific risk be diversified away by investing in both Marathon Oil and Cardano 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 Oil and Cardano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marathon Oil Corp and Cardano, you can compare the effects of market volatilities on Marathon Oil and Cardano 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 Oil with a short position of Cardano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Oil and Cardano.

Diversification Opportunities for Marathon Oil and Cardano

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Marathon and Cardano is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil Corp and Cardano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardano and Marathon Oil 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 Oil Corp are associated (or correlated) with Cardano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardano has no effect on the direction of Marathon Oil i.e., Marathon Oil and Cardano go up and down completely randomly.

Pair Corralation between Marathon Oil and Cardano

Considering the 90-day investment horizon Marathon Oil Corp is expected to generate 0.57 times more return on investment than Cardano. However, Marathon Oil Corp is 1.76 times less risky than Cardano. It trades about 0.11 of its potential returns per unit of risk. Cardano is currently generating about -0.08 per unit of risk. If you would invest  651.00  in Marathon Oil Corp on August 28, 2022 and sell it today you would earn a total of  2,387  from holding Marathon Oil Corp or generate 366.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy57.83%
ValuesDaily Returns

Marathon Oil Corp  vs.  Cardano

 Performance (%) 
       Timeline  
Marathon Oil Corp 
Marathon Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Oil Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Marathon Oil disclosed solid returns over the last few months and may actually be approaching a breakup point.

Marathon Price Channel

Cardano 
Cardano Performance
0 of 100
Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for Cardano investors.

Cardano Price Channel

Marathon Oil and Cardano Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and Cardano

The main advantage of trading using opposite Marathon Oil and Cardano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, Cardano 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 Cardano will offset losses from the drop in Cardano's long position.
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The idea behind Marathon Oil Corp and Cardano 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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