Correlation Between Ecopetrol and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Delek Energy 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 Delek Energy 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 Delek Energy, you can compare the effects of market volatilities on Ecopetrol and Delek Energy 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 Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Delek Energy.
Diversification Opportunities for Ecopetrol and Delek Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ecopetrol and Delek is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy 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 Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Ecopetrol i.e., Ecopetrol and Delek Energy go up and down completely randomly.
Pair Corralation between Ecopetrol and Delek Energy
Allowing for the 90-day total investment horizon Ecopetrol SA ADR is expected to generate 0.8 times more return on investment than Delek Energy. However, Ecopetrol SA ADR is 1.25 times less risky than Delek Energy. It trades about 0.34 of its potential returns per unit of risk. Delek Energy is currently generating about -0.09 per unit of risk. If you would invest 845.00 in Ecopetrol SA ADR on November 18, 2024 and sell it today you would earn a total of 180.00 from holding Ecopetrol SA ADR or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopetrol SA ADR vs. Delek Energy
Performance |
| Timeline |
| Ecopetrol SA ADR |
| Delek Energy |
Ecopetrol and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Delek Energy
The main advantage of trading using opposite Ecopetrol and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Delek Energy 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 Delek Energy will offset losses from the drop in Delek Energy's long position.| Ecopetrol vs. Petroleo Brasileiro Petrobras | Ecopetrol vs. Equinor ASA ADR | Ecopetrol vs. Eni SpA ADR | Ecopetrol vs. Cenovus Energy |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |