Correlation Between Marathon Oil and LQ BARR

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

Diversification Opportunities for Marathon Oil and LQ BARR

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Marathon and Q00262 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil Corp and LQ BARR EXP FORDTESLA 60 31032 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LQ BARR EXP 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 LQ BARR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LQ BARR EXP has no effect on the direction of Marathon Oil i.e., Marathon Oil and LQ BARR go up and down completely randomly.

Pair Corralation between Marathon Oil and LQ BARR

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
Accuracy4.55%
ValuesDaily Returns

Marathon Oil Corp  vs.  LQ BARR EXP FORDTESLA 60 31032

 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

LQ BARR EXP 
Q00262 Performance
0 of 100
Over the last 90 days LQ BARR EXP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LQ BARR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marathon Oil and LQ BARR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and LQ BARR

The main advantage of trading using opposite Marathon Oil and LQ BARR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, LQ BARR 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 LQ BARR will offset losses from the drop in LQ BARR's long position.
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The idea behind Marathon Oil Corp and LQ BARR EXP 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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