Correlation Between ABN AMRO and Murphy USA
Can any of the company-specific risk be diversified away by investing in both ABN AMRO and Murphy USA 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 ABN AMRO and Murphy USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABN AMRO Bank and Murphy USA, you can compare the effects of market volatilities on ABN AMRO and Murphy USA 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 ABN AMRO with a short position of Murphy USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABN AMRO and Murphy USA.
Diversification Opportunities for ABN AMRO and Murphy USA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between ABN and Murphy is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ABN AMRO Bank and Murphy USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy USA and ABN AMRO 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 ABN AMRO Bank are associated (or correlated) with Murphy USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy USA has no effect on the direction of ABN AMRO i.e., ABN AMRO and Murphy USA go up and down completely randomly.
Pair Corralation between ABN AMRO and Murphy USA
Assuming the 90 days horizon ABN AMRO Bank is expected to generate 0.78 times more return on investment than Murphy USA. However, ABN AMRO Bank is 1.28 times less risky than Murphy USA. It trades about 0.14 of its potential returns per unit of risk. Murphy USA is currently generating about 0.01 per unit of risk. If you would invest 2,988 in ABN AMRO Bank on September 6, 2025 and sell it today you would earn a total of 452.00 from holding ABN AMRO Bank or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
ABN AMRO Bank vs. Murphy USA
Performance |
| Timeline |
| ABN AMRO Bank |
| Murphy USA |
ABN AMRO and Murphy USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABN AMRO and Murphy USA
The main advantage of trading using opposite ABN AMRO and Murphy USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABN AMRO position performs unexpectedly, Murphy USA 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 Murphy USA will offset losses from the drop in Murphy USA's long position.| ABN AMRO vs. JPMorgan Chase Co | ABN AMRO vs. Bank of America | ABN AMRO vs. Bank of America | ABN AMRO vs. Wells Fargo |
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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 the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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