Correlation Between Marathon Oil and ApeCoin

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Can any of the company-specific risk be diversified away by investing in both Marathon Oil and ApeCoin 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 ApeCoin 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 ApeCoin, you can compare the effects of market volatilities on Marathon Oil and ApeCoin 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 ApeCoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Oil and ApeCoin.

Diversification Opportunities for Marathon Oil and ApeCoin

-0.77
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Marathon and ApeCoin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil Corp and ApeCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ApeCoin 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 ApeCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ApeCoin has no effect on the direction of Marathon Oil i.e., Marathon Oil and ApeCoin go up and down completely randomly.

Pair Corralation between Marathon Oil and ApeCoin

Considering the 90-day investment horizon Marathon Oil Corp is expected to generate 0.28 times more return on investment than ApeCoin. However, Marathon Oil Corp is 3.61 times less risky than ApeCoin. It trades about 0.01 of its potential returns per unit of risk. ApeCoin is currently generating about -0.13 per unit of risk. If you would invest  3,044  in Marathon Oil Corp on August 28, 2022 and sell it today you would lose (6.00)  from holding Marathon Oil Corp or give up 0.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Marathon Oil Corp  vs.  ApeCoin

 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

ApeCoin 
ApeCoin Performance
0 of 100
Over the last 90 days ApeCoin 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 basic 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 ApeCoin investors.

ApeCoin Price Channel

Marathon Oil and ApeCoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and ApeCoin

The main advantage of trading using opposite Marathon Oil and ApeCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, ApeCoin 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 ApeCoin will offset losses from the drop in ApeCoin's long position.
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The idea behind Marathon Oil Corp and ApeCoin 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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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