Correlation Between Ecopetrol and Argo Group
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Argo Group 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 Ecopetrol and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopetrol SA ADR and Argo Group International, you can compare the effects of market volatilities on Ecopetrol and Argo Group 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 Ecopetrol with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Argo Group.
Diversification Opportunities for Ecopetrol and Argo Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecopetrol and Argo is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International and Ecopetrol 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 Ecopetrol SA ADR are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of Ecopetrol i.e., Ecopetrol and Argo Group go up and down completely randomly.
Pair Corralation between Ecopetrol and Argo Group
If you would invest 0.00 in Argo Group International on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Argo Group International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Ecopetrol SA ADR vs. Argo Group International
Performance |
| Timeline |
| Ecopetrol SA ADR |
| Argo Group International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecopetrol and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Argo Group
The main advantage of trading using opposite Ecopetrol and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| Ecopetrol vs. Petroleo Brasileiro Petrobras | Ecopetrol vs. Equinor ASA ADR | Ecopetrol vs. Eni SpA ADR | Ecopetrol vs. Cenovus Energy |
| Argo Group vs. Selective Insurance Group | Argo Group vs. Kemper | Argo Group vs. Donegal Group B | Argo Group vs. Argo Group International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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