Correlation Between Ecopetrol and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Astronics Corp 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 Astronics Corp 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 Astronics Corp Cl, you can compare the effects of market volatilities on Ecopetrol and Astronics Corp 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 Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Astronics Corp.
Diversification Opportunities for Ecopetrol and Astronics Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecopetrol and Astronics is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of Ecopetrol i.e., Ecopetrol and Astronics Corp go up and down completely randomly.
Pair Corralation between Ecopetrol and Astronics Corp
Allowing for the 90-day total investment horizon Ecopetrol SA ADR is expected to under-perform the Astronics Corp. But the stock apears to be less risky and, when comparing its historical volatility, Ecopetrol SA ADR is 2.59 times less risky than Astronics Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Astronics Corp Cl is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,656 in Astronics Corp Cl on August 29, 2024 and sell it today you would lose (72.00) from holding Astronics Corp Cl or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Ecopetrol SA ADR vs. Astronics Corp Cl
Performance |
| Timeline |
| Ecopetrol SA ADR |
| Astronics Corp Cl |
Ecopetrol and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Astronics Corp
The main advantage of trading using opposite Ecopetrol and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.| Ecopetrol vs. Petroleo Brasileiro Petrobras | Ecopetrol vs. Equinor ASA ADR | Ecopetrol vs. Eni SpA ADR | Ecopetrol vs. Cenovus Energy |
| Astronics Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |