Correlation Between ARDAGH METAL and Ecopetrol
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Ecopetrol SA, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Ecopetrol.
Diversification Opportunities for ARDAGH METAL and Ecopetrol
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARDAGH and Ecopetrol is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Ecopetrol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Ecopetrol go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Ecopetrol
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Ecopetrol. In addition to that, ARDAGH METAL is 2.22 times more volatile than Ecopetrol SA. It trades about -0.1 of its total potential returns per unit of risk. Ecopetrol SA is currently generating about 0.37 per unit of volatility. If you would invest 728.00 in Ecopetrol SA on October 23, 2024 and sell it today you would earn a total of 84.00 from holding Ecopetrol SA or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Ecopetrol SA
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Ecopetrol SA |
ARDAGH METAL and Ecopetrol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Ecopetrol
The main advantage of trading using opposite ARDAGH METAL and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. SOEDER SPORTFISKE AB | ARDAGH METAL vs. IDP EDUCATION LTD | ARDAGH METAL vs. BII Railway Transportation | ARDAGH METAL vs. USWE SPORTS AB |
| Ecopetrol vs. ARDAGH METAL PACDL 0001 | Ecopetrol vs. Stag Industrial | Ecopetrol vs. SLR Investment Corp | Ecopetrol vs. MidCap Financial Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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