Correlation Between Marathon Petroleum and IRPC Public

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

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

Diversification Opportunities for Marathon Petroleum and IRPC Public

-0.35

Correlation Coefficient

Marathon Petroleum  IRPC Public

Very good diversification

The 3 months correlation between Marathon and IRPC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Marathon Petroleum Corp and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public 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 Corp are associated (or correlated) with IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of Marathon Petroleum i.e., Marathon Petroleum and IRPC Public go up and down completely randomly.

Pair Corralation between Marathon Petroleum and IRPC Public

Assuming the 90 days horizon Marathon Petroleum Corp is expected to generate 0.51 times more return on investment than IRPC Public. However, Marathon Petroleum Corp is 1.98 times less risky than IRPC Public. It trades about 0.21 of its potential returns per unit of risk. IRPC Public is currently generating about 0.07 per unit of risk. If you would invest  11,708  in Marathon Petroleum Corp on April 24, 2025 and sell it today you would earn a total of  3,136  from holding Marathon Petroleum Corp or generate 26.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Marathon Petroleum Corp  vs.  IRPC Public

Marathon Petroleum Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Petroleum Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Marathon Petroleum reported solid returns over the last few months and may actually be approaching a breakup point.

IRPC Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IRPC Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting forward indicators, IRPC Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marathon Petroleum and IRPC Public

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

The idea behind Marathon Petroleum Corp and IRPC Public 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.