Correlation Between Marathon Oil and Intuit

Can any of the company-specific risk be diversified away by investing in both Marathon Oil and Intuit 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 Intuit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marathon Oil and Intuit Inc, you can compare the effects of market volatilities on Marathon Oil and Intuit 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 Intuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Oil and Intuit.

Diversification Opportunities for Marathon Oil and Intuit

-0.78

Correlation Coefficient

Marathon Oil  Intuit

Pay attention - limited upside

The 3 months correlation between Marathon and Intuit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Oil and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc 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 Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Marathon Oil i.e., Marathon Oil and Intuit go up and down completely randomly.

Pair Corralation between Marathon Oil and Intuit

Assuming the 90 days trading horizon Marathon Oil is expected to generate 1.33 times more return on investment than Intuit. However, Marathon Oil is 1.33 times more volatile than Intuit Inc. It trades about 0.11 of its potential returns per unit of risk. Intuit Inc is currently generating about -0.06 per unit of risk. If you would invest  39,853  in Marathon Oil on February 19, 2024 and sell it today you would earn a total of  4,518  from holding Marathon Oil or generate 11.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Marathon Oil  vs.  Intuit Inc

Marathon Oil

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Oil are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marathon Oil may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Intuit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Intuit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marathon Oil and Intuit

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

The idea behind Marathon Oil and Intuit Inc 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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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 the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.