Correlation Between Marathon Petroleum and Charter Communications

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

By analyzing existing cross correlation between Marathon Petroleum and Charter Communications, you can compare the effects of market volatilities on Marathon Petroleum and Charter Communications 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 Petroleum with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marathon Petroleum and Charter Communications.

Diversification Opportunities for Marathon Petroleum and Charter Communications

-0.33

Correlation Coefficient

Marathon Petroleum  Charter Communications

Very good diversification

The 3 months correlation between Marathon and Charter is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and Marathon Petroleum 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 Petroleum are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and Charter Communications go up and down completely randomly.

Pair Corralation between Marathon Petroleum and Charter Communications

Assuming the 90 days trading horizon Marathon Petroleum is expected to generate 1.6 times less return on investment than Charter Communications. But when comparing it to its historical volatility, Marathon Petroleum is 1.05 times less risky than Charter Communications. It trades about 0.07 of its potential returns per unit of risk. Charter Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,167  in Charter Communications on April 24, 2025 and sell it today you would earn a total of  485.00  from holding Charter Communications or generate 15.31% return on investment over 90 days.

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

Marathon Petroleum  vs.  Charter Communications

Marathon Petroleum

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Petroleum are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Marathon Petroleum may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Charter Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Charter Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marathon Petroleum and Charter Communications

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

The idea behind Marathon Petroleum and Charter Communications 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.

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 the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.