Correlation Between Marathon Oil and OPTIMUM FIXED

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

Diversification Opportunities for Marathon Oil and OPTIMUM FIXED

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Marathon and OPTIMUM is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil and OPTIMUM FIXED INCOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPTIMUM FIXED INCOME 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 are associated (or correlated) with OPTIMUM FIXED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPTIMUM FIXED INCOME has no effect on the direction of Marathon Oil i.e., Marathon Oil and OPTIMUM FIXED go up and down completely randomly.

Pair Corralation between Marathon Oil and OPTIMUM FIXED

Considering the 90-day investment horizon Marathon Oil is expected to under-perform the OPTIMUM FIXED. In addition to that, Marathon Oil is 5.15 times more volatile than OPTIMUM FIXED INCOME. It trades about -0.08 of its total potential returns per unit of risk. OPTIMUM FIXED INCOME is currently generating about 0.49 per unit of volatility. If you would invest  795.00  in OPTIMUM FIXED INCOME on September 4, 2022 and sell it today you would earn a total of  45.00  from holding OPTIMUM FIXED INCOME or generate 5.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Marathon Oil  vs.  OPTIMUM FIXED INCOME

 Performance (%) 
       Timeline  
Marathon Oil 
Marathon Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Oil are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Marathon Oil disclosed solid returns over the last few months and may actually be approaching a breakup point.

Marathon Price Channel

OPTIMUM FIXED INCOME 
OPTIMUM Performance
0 of 100
Over the last 90 days OPTIMUM FIXED INCOME has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, OPTIMUM FIXED is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

OPTIMUM Price Channel

Marathon Oil and OPTIMUM FIXED Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and OPTIMUM FIXED

The main advantage of trading using opposite Marathon Oil and OPTIMUM FIXED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, OPTIMUM FIXED 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 OPTIMUM FIXED will offset losses from the drop in OPTIMUM FIXED's long position.
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The idea behind Marathon Oil and OPTIMUM FIXED INCOME 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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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