Correlation Between Grupo Carso and Ecopetrol
Can any of the company-specific risk be diversified away by investing in both Grupo Carso and Ecopetrol 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 Grupo Carso and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Carso SAB and Ecopetrol SA, you can compare the effects of market volatilities on Grupo Carso and Ecopetrol 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 Grupo Carso with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Ecopetrol.
Diversification Opportunities for Grupo Carso and Ecopetrol
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Ecopetrol is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Ecopetrol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA and Grupo Carso 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 Grupo Carso SAB are associated (or correlated) with Ecopetrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopetrol SA has no effect on the direction of Grupo Carso i.e., Grupo Carso and Ecopetrol go up and down completely randomly.
Pair Corralation between Grupo Carso and Ecopetrol
Assuming the 90 days horizon Grupo Carso SAB is expected to generate 1.33 times more return on investment than Ecopetrol. However, Grupo Carso is 1.33 times more volatile than Ecopetrol SA. It trades about 0.12 of its potential returns per unit of risk. Ecopetrol SA is currently generating about 0.15 per unit of risk. If you would invest 540.00 in Grupo Carso SAB on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Grupo Carso SAB or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Ecopetrol SA
Performance |
| Timeline |
| Grupo Carso SAB |
| Ecopetrol SA |
Grupo Carso and Ecopetrol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Ecopetrol
The main advantage of trading using opposite Grupo Carso and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, Ecopetrol 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 Ecopetrol will offset losses from the drop in Ecopetrol's long position.| Grupo Carso vs. Superior Plus Corp | Grupo Carso vs. NMI Holdings | Grupo Carso vs. Origin Agritech | Grupo Carso vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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