Stock Analysis on Net

Marathon Oil Corp. (NYSE:MRO)

This company has been moved to the archive! The financial data has not been updated since August 4, 2022.

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Rates of Return

Marathon Oil Corp., monthly rates of return

Microsoft Excel
Marathon Oil Corp. (MRO) Standard & Poor’s 500 (S&P 500)
t Date PriceMRO,t1 DividendMRO,t1 RMRO,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2017 $16.75 2,278.87
1. Feb 28, 2017 $16.00 $0.05 -4.18% 2,363.64 3.72%
2. Mar 31, 2017 $15.80 -1.25% 2,362.72 -0.04%
3. Apr 30, 2017 $14.87 -5.89% 2,384.20 0.91%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2021 $15.49 $0.06 -4.72% 4,567.00 -0.83%
59. Dec 31, 2021 $16.42 6.00% 4,766.18 4.36%
Average (R): 2.04% 1.36%
Standard deviation: 20.26% 4.48%
Marathon Oil Corp. (MRO) Standard & Poor’s 500 (S&P 500)
t Date PriceMRO,t1 DividendMRO,t1 RMRO,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2017 $16.75 2,278.87
1. Feb 28, 2017 $16.00 $0.05 -4.18% 2,363.64 3.72%
2. Mar 31, 2017 $15.80 -1.25% 2,362.72 -0.04%
3. Apr 30, 2017 $14.87 -5.89% 2,384.20 0.91%
4. May 31, 2017 $13.02 $0.05 -12.10% 2,411.80 1.16%
5. Jun 30, 2017 $11.85 -8.99% 2,423.41 0.48%
6. Jul 31, 2017 $12.23 3.21% 2,470.30 1.93%
7. Aug 31, 2017 $11.12 $0.05 -8.67% 2,471.65 0.05%
8. Sep 30, 2017 $13.56 21.94% 2,519.36 1.93%
9. Oct 31, 2017 $14.22 4.87% 2,575.26 2.22%
10. Nov 30, 2017 $14.84 $0.05 4.71% 2,647.58 2.81%
11. Dec 31, 2017 $16.93 14.08% 2,673.61 0.98%
12. Jan 31, 2018 $18.19 7.44% 2,823.81 5.62%
13. Feb 28, 2018 $14.52 $0.05 -19.90% 2,713.83 -3.89%
14. Mar 31, 2018 $16.13 11.09% 2,640.87 -2.69%
15. Apr 30, 2018 $18.25 13.14% 2,648.05 0.27%
16. May 31, 2018 $21.43 $0.05 17.70% 2,705.27 2.16%
17. Jun 30, 2018 $20.86 -2.66% 2,718.37 0.48%
18. Jul 31, 2018 $21.12 1.25% 2,816.29 3.60%
19. Aug 31, 2018 $21.51 $0.05 2.08% 2,901.52 3.03%
20. Sep 30, 2018 $23.28 8.23% 2,913.98 0.43%
21. Oct 31, 2018 $18.99 -18.43% 2,711.74 -6.94%
22. Nov 30, 2018 $16.69 $0.05 -11.85% 2,760.17 1.79%
23. Dec 31, 2018 $14.34 -14.08% 2,506.85 -9.18%
24. Jan 31, 2019 $15.79 10.11% 2,704.10 7.87%
25. Feb 28, 2019 $16.60 $0.05 5.45% 2,784.49 2.97%
26. Mar 31, 2019 $16.71 0.66% 2,834.40 1.79%
27. Apr 30, 2019 $17.04 1.97% 2,945.83 3.93%
28. May 31, 2019 $13.15 $0.05 -22.54% 2,752.06 -6.58%
29. Jun 30, 2019 $14.21 8.06% 2,941.76 6.89%
30. Jul 31, 2019 $14.07 -0.99% 2,980.38 1.31%
31. Aug 31, 2019 $11.84 $0.05 -15.49% 2,926.46 -1.81%
32. Sep 30, 2019 $12.27 3.63% 2,976.74 1.72%
33. Oct 31, 2019 $11.53 -6.03% 3,037.56 2.04%
34. Nov 30, 2019 $11.65 $0.05 1.47% 3,140.98 3.40%
35. Dec 31, 2019 $13.58 16.57% 3,230.78 2.86%
36. Jan 31, 2020 $11.37 -16.27% 3,225.52 -0.16%
37. Feb 29, 2020 $8.28 $0.05 -26.74% 2,954.22 -8.41%
38. Mar 31, 2020 $3.29 -60.27% 2,584.59 -12.51%
39. Apr 30, 2020 $6.12 86.02% 2,912.43 12.68%
40. May 31, 2020 $5.34 -12.75% 3,044.31 4.53%
41. Jun 30, 2020 $6.12 14.61% 3,100.29 1.84%
42. Jul 31, 2020 $5.49 -10.29% 3,271.12 5.51%
43. Aug 31, 2020 $5.28 -3.83% 3,500.31 7.01%
44. Sep 30, 2020 $4.09 -22.54% 3,363.00 -3.92%
45. Oct 31, 2020 $3.96 -3.18% 3,269.96 -2.77%
46. Nov 30, 2020 $5.92 $0.03 50.25% 3,621.63 10.75%
47. Dec 31, 2020 $6.67 12.67% 3,756.07 3.71%
48. Jan 31, 2021 $7.24 8.55% 3,714.24 -1.11%
49. Feb 28, 2021 $11.10 $0.03 53.73% 3,811.15 2.61%
50. Mar 31, 2021 $10.68 -3.78% 3,972.89 4.24%
51. Apr 30, 2021 $11.26 5.43% 4,181.17 5.24%
52. May 31, 2021 $12.11 $0.04 7.90% 4,204.11 0.55%
53. Jun 30, 2021 $13.62 12.47% 4,297.50 2.22%
54. Jul 31, 2021 $11.59 -14.90% 4,395.26 2.27%
55. Aug 31, 2021 $11.75 $0.05 1.81% 4,522.68 2.90%
56. Sep 30, 2021 $13.67 16.34% 4,307.54 -4.76%
57. Oct 31, 2021 $16.32 19.39% 4,605.38 6.91%
58. Nov 30, 2021 $15.49 $0.06 -4.72% 4,567.00 -0.83%
59. Dec 31, 2021 $16.42 6.00% 4,766.18 4.36%
Average (R): 2.04% 1.36%
Standard deviation: 20.26% 4.48%

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1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of MRO during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

Marathon Oil Corp., calculation of variance and covariance of returns

Microsoft Excel
t Date RMRO,t RS&P 500,t (RMRO,tRMRO)2 (RS&P 500,tRS&P 500)2 (RMRO,tRMRO)×(RS&P 500,tRS&P 500)
1. Feb 28, 2017 -4.18% 3.72% 38.71 5.58 -14.70
2. Mar 31, 2017 -1.25% -0.04% 10.84 1.95 4.60
3. Apr 30, 2017 -5.89% 0.91% 62.87 0.20 3.56
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2021 -4.72% -0.83% 45.71 4.80 14.82
59. Dec 31, 2021 6.00% 4.36% 15.69 9.02 11.90
Total (Σ): 23,800.60 1,164.17 3,520.83
t Date RMRO,t RS&P 500,t (RMRO,tRMRO)2 (RS&P 500,tRS&P 500)2 (RMRO,tRMRO)×(RS&P 500,tRS&P 500)
1. Feb 28, 2017 -4.18% 3.72% 38.71 5.58 -14.70
2. Mar 31, 2017 -1.25% -0.04% 10.84 1.95 4.60
3. Apr 30, 2017 -5.89% 0.91% 62.87 0.20 3.56
4. May 31, 2017 -12.10% 1.16% 200.16 0.04 2.83
5. Jun 30, 2017 -8.99% 0.48% 121.64 0.77 9.67
6. Jul 31, 2017 3.21% 1.93% 1.35 0.33 0.67
7. Aug 31, 2017 -8.67% 0.05% 114.71 1.70 13.96
8. Sep 30, 2017 21.94% 1.93% 395.99 0.33 11.39
9. Oct 31, 2017 4.87% 2.22% 7.98 0.74 2.43
10. Nov 30, 2017 4.71% 2.81% 7.12 2.10 3.87
11. Dec 31, 2017 14.08% 0.98% 144.97 0.14 -4.51
12. Jan 31, 2018 7.44% 5.62% 29.15 18.15 23.00
13. Feb 28, 2018 -19.90% -3.89% 481.54 27.59 115.26
14. Mar 31, 2018 11.09% -2.69% 81.81 16.37 -36.60
15. Apr 30, 2018 13.14% 0.27% 123.21 1.18 -12.06
16. May 31, 2018 17.70% 2.16% 245.10 0.64 12.57
17. Jun 30, 2018 -2.66% 0.48% 22.12 0.76 4.11
18. Jul 31, 2018 1.25% 3.60% 0.63 5.04 -1.79
19. Aug 31, 2018 2.08% 3.03% 0.00 2.78 0.07
20. Sep 30, 2018 8.23% 0.43% 38.26 0.86 -5.74
21. Oct 31, 2018 -18.43% -6.94% 419.06 68.86 169.87
22. Nov 30, 2018 -11.85% 1.79% 192.97 0.18 -5.95
23. Dec 31, 2018 -14.08% -9.18% 259.96 111.00 169.87
24. Jan 31, 2019 10.11% 7.87% 65.10 42.39 52.53
25. Feb 28, 2019 5.45% 2.97% 11.58 2.61 5.50
26. Mar 31, 2019 0.66% 1.79% 1.91 0.19 -0.60
27. Apr 30, 2019 1.97% 3.93% 0.00 6.62 -0.18
28. May 31, 2019 -22.54% -6.58% 604.09 62.97 195.04
29. Jun 30, 2019 8.06% 6.89% 36.21 30.64 33.31
30. Jul 31, 2019 -0.99% 1.31% 9.17 0.00 0.14
31. Aug 31, 2019 -15.49% -1.81% 307.55 10.03 55.54
32. Sep 30, 2019 3.63% 1.72% 2.52 0.13 0.57
33. Oct 31, 2019 -6.03% 2.04% 65.19 0.47 -5.53
34. Nov 30, 2019 1.47% 3.40% 0.32 4.19 -1.16
35. Dec 31, 2019 16.57% 2.86% 210.93 2.25 21.80
36. Jan 31, 2020 -16.27% -0.16% 335.51 2.31 27.85
37. Feb 29, 2020 -26.74% -8.41% 828.29 95.43 281.15
38. Mar 31, 2020 -60.27% -12.51% 3,882.38 192.37 864.21
39. Apr 30, 2020 86.02% 12.68% 7,051.84 128.29 951.15
40. May 31, 2020 -12.75% 4.53% 218.69 10.05 -46.88
41. Jun 30, 2020 14.61% 1.84% 157.85 0.23 6.04
42. Jul 31, 2020 -10.29% 5.51% 152.21 17.24 -51.23
43. Aug 31, 2020 -3.83% 7.01% 34.44 31.91 -33.15
44. Sep 30, 2020 -22.54% -3.92% 604.22 27.89 129.80
45. Oct 31, 2020 -3.18% -2.77% 27.26 17.01 21.54
46. Nov 30, 2020 50.25% 10.75% 2,324.16 88.30 453.01
47. Dec 31, 2020 12.67% 3.71% 112.91 5.54 25.02
48. Jan 31, 2021 8.55% -1.11% 42.29 6.11 -16.07
49. Feb 28, 2021 53.73% 2.61% 2,671.47 1.57 64.67
50. Mar 31, 2021 -3.78% 4.24% 33.95 8.33 -16.82
51. Apr 30, 2021 5.43% 5.24% 11.48 15.09 13.16
52. May 31, 2021 7.90% 0.55% 34.35 0.65 -4.74
53. Jun 30, 2021 12.47% 2.22% 108.70 0.75 9.00
54. Jul 31, 2021 -14.90% 2.27% 287.22 0.84 -15.54
55. Aug 31, 2021 1.81% 2.90% 0.05 2.38 -0.36
56. Sep 30, 2021 16.34% -4.76% 204.42 37.39 -87.43
57. Oct 31, 2021 19.39% 6.91% 300.76 30.87 96.36
58. Nov 30, 2021 -4.72% -0.83% 45.71 4.80 14.82
59. Dec 31, 2021 6.00% 4.36% 15.69 9.02 11.90
Total (Σ): 23,800.60 1,164.17 3,520.83

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VarianceMRO = Σ(RMRO,tRMRO)2 ÷ (59 – 1)
= 23,800.60 ÷ (59 – 1)
= 410.36

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (59 – 1)
= 1,164.17 ÷ (59 – 1)
= 20.07

CovarianceMRO, S&P 500 = Σ(RMRO,tRMRO)×(RS&P 500,tRS&P 500) ÷ (59 – 1)
= 3,520.83 ÷ (59 – 1)
= 60.70


Systematic Risk (β) Estimation

Microsoft Excel
VarianceMRO 410.36
VarianceS&P 500 20.07
CovarianceMRO, S&P 500 60.70
Correlation coefficientMRO, S&P 5001 0.67
βMRO2 3.02
αMRO3 -2.06%

Calculations

1 Correlation coefficientMRO, S&P 500
= CovarianceMRO, S&P 500 ÷ (Standard deviationMRO × Standard deviationS&P 500)
= 60.70 ÷ (20.26% × 4.48%)
= 0.67

2 βMRO
= CovarianceMRO, S&P 500 ÷ VarianceS&P 500
= 60.70 ÷ 20.07
= 3.02

3 αMRO
= AverageMRO – βMRO × AverageS&P 500
= 2.04%3.02 × 1.36%
= -2.06%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.43%
Expected rate of return on market portfolio2 E(RM) 13.61%
Systematic risk (β) of Marathon Oil Corp. common stock βMRO 3.02
 
Expected rate of return on Marathon Oil Corp. common stock3 E(RMRO) 32.19%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RMRO) = RF + βMRO [E(RM) – RF]
= 4.43% + 3.02 [13.61%4.43%]
= 32.19%