Shares of Marathon Oil (NYSE: MRO) gained 9.8% last week despite a slight correction seen in the benchmarks Brent and WTI. The Company explores and produces crude oil, condensates and natural gas in the United States and certain international locations. In 2020, the company’s revenue contracted 40% (year-over-year) resulting in a net loss of $ 1.4 billion. However, positive operating cash flow supported capital spending and dividends. Saudi Arabia’s further cut in production by 1 mb / d in February pushed benchmark prices higher, but it is highly likely that OPEC will guide an increase in crude oil production next time. meeting. Thus, Trefis believes that Marathon Oil stock is not a good choice to extend last week’s gains.
But how would those numbers change if you are interested in holding Marathon Oil Corporation shares for a shorter or longer period? You can test the answer and many other combinations on the Trefis Machine learning engine to test the chances of rising Marathon Oil stocks after a fall. You can test the chances of recovery over different time intervals of a quarter, a month, or even a single day!
MACHINE LEARNING MOTOR – try it yourself:
IF The MRO share has changed by -5% over five trading days, SO over the next twenty-one trading days, the MRO share moves way of -0.8%, which implies a excess return -1.6% compared to the S & P500.
More importantly, there is a 50% chance that a positive feedback over the next twenty-one trading days and 44% probability positive excess return after a variation of -5% over five trading days.
Some fun scenarios, FAQs, and an idea of Marathon’s oil stock movements:
Question 1: Is the average return of Marathon Oil share higher after a decline?
Consider two situations,
Case 1: Marathon Oil stock drops by -5% or more in a week
Case 2: Marathon Oil stock increases by 5% or more in a week
Is the average Marathon Oil share return higher in the next month after case 1 or 2?
MRO stock fares better after case 2, with an average return of -0.3% over the following month (twenty-one trading days) in case 1 (where the stock has just suffered a loss of 5% over the previous week), against an average return 2.8% for case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days in Case 1, and an average return of only 0.5% for Case 2, as detailed in our table. on board which details the average return of the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how the Marathon Oil stock is likely to behave after a specific gain or loss over a period of time.
Question 2: Does patience pay?
If you buy and hold shares in Marathon Oil, it is expected that over time the short-term fluctuations will cancel out and the positive long-term trend will favor you – at least if the company is otherwise strong. .
Overall, according to data and calculations from Trefis’ machine learning engine, patience absolutely pays for most of the stock!
For the MRO share, the returns over the next N days after a -5% change over the last five trading days are detailed in the table below, along with the returns of the S & P500:
You can try out the engine to see what this chart looks like for Marathon Oil after losing more in the past week, month, or quarter.
Question 3: What about the average return after a rise if you wait a while?
The average return after a rise is naturally lower than a fall, as detailed in the previous question. Interestingly, however, if a stock has won in the last few days, you’d better avoid short-term bets for most stocks – although MRO stock seems to be an exception to this general observation.
The MRO returns over the next N days after a 5% change in the last five trading days are detailed in the table below, along with the S & P500 returns:
It is powerful enough to test the trend of the Marathon Oil stock for yourself by modifying the data in the charts above.
With MRO stock being an uncertain bet at current levels, 2020 has created many price discontinuities which may provide some interesting trading opportunities. For example, you will be surprised at how the valuation of stocks for Atmos Energy vs. World Wrestling Entertainment shows a disconnect with their relative operational growth. You can find many such staple pairs here.
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