Correlation Between Marathon Oil and Stratis

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

Diversification Opportunities for Marathon Oil and Stratis

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Marathon and Stratis is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil Corp and Stratis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratis 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 Stratis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratis has no effect on the direction of Marathon Oil i.e., Marathon Oil and Stratis go up and down completely randomly.

Pair Corralation between Marathon Oil and Stratis

Considering the 90-day investment horizon Marathon Oil Corp is expected to generate 0.45 times more return on investment than Stratis. However, Marathon Oil Corp is 2.24 times less risky than Stratis. It trades about 0.1 of its potential returns per unit of risk. Stratis is currently generating about -0.03 per unit of risk. If you would invest  688.00  in Marathon Oil Corp on August 30, 2022 and sell it today you would earn a total of  2,350  from holding Marathon Oil Corp or generate 341.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy58.35%
ValuesDaily Returns

Marathon Oil Corp  vs.  Stratis

 Performance (%) 
       Timeline  
Marathon Oil Corp 
Marathon Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Oil Corp are ranked lower than 7 (%) 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

Stratis 
Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Stratis investors.

Stratis Price Channel

Marathon Oil and Stratis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marathon Oil and Stratis

The main advantage of trading using opposite Marathon Oil and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marathon Oil position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind Marathon Oil Corp and Stratis 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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