Correlation Between Marathon Oil and HUTCHISON PORT

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

Diversification Opportunities for Marathon Oil and HUTCHISON PORT

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Marathon and HUTCHISON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil Corp and HUTCHISON PORT HLDGS UTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHISON PORT HLDGS 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 HUTCHISON PORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHISON PORT HLDGS has no effect on the direction of Marathon Oil i.e., Marathon Oil and HUTCHISON PORT go up and down completely randomly.

Pair Corralation between Marathon Oil and HUTCHISON PORT

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]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Marathon Oil Corp  vs.  HUTCHISON PORT HLDGS UTS

 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

HUTCHISON PORT HLDGS 
HUTCHISON Performance
0 of 100
Over the last 90 days HUTCHISON PORT HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HUTCHISON PORT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Marathon Oil and HUTCHISON PORT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and HUTCHISON PORT

The main advantage of trading using opposite Marathon Oil and HUTCHISON PORT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, HUTCHISON PORT 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 HUTCHISON PORT will offset losses from the drop in HUTCHISON PORT's long position.
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The idea behind Marathon Oil Corp and HUTCHISON PORT HLDGS 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against HUTCHISON PORT as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. HUTCHISON PORT's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, HUTCHISON PORT's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to HUTCHISON PORT HLDGS.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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