Correlation Between Ecopetrol and Eiger Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Eiger Biopharmaceutica 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 Eiger Biopharmaceutica 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 Eiger Biopharmaceuticals, you can compare the effects of market volatilities on Ecopetrol and Eiger Biopharmaceutica 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 Eiger Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Eiger Biopharmaceutica.
Diversification Opportunities for Ecopetrol and Eiger Biopharmaceutica
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecopetrol and Eiger is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and Eiger Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiger Biopharmaceuticals 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 Eiger Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiger Biopharmaceuticals has no effect on the direction of Ecopetrol i.e., Ecopetrol and Eiger Biopharmaceutica go up and down completely randomly.
Pair Corralation between Ecopetrol and Eiger Biopharmaceutica
If you would invest 74.00 in Eiger Biopharmaceuticals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Eiger Biopharmaceuticals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Ecopetrol SA ADR vs. Eiger Biopharmaceuticals
Performance |
| Timeline |
| Ecopetrol SA ADR |
| Eiger Biopharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecopetrol and Eiger Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Eiger Biopharmaceutica
The main advantage of trading using opposite Ecopetrol and Eiger Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Eiger Biopharmaceutica 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 Eiger Biopharmaceutica will offset losses from the drop in Eiger Biopharmaceutica's long position.| Ecopetrol vs. Petroleo Brasileiro Petrobras | Ecopetrol vs. Equinor ASA ADR | Ecopetrol vs. Eni SpA ADR | Ecopetrol vs. Cenovus Energy |
| Eiger Biopharmaceutica vs. Spero Therapeutics | Eiger Biopharmaceutica vs. Bolt Biotherapeutics | Eiger Biopharmaceutica vs. Coherus BioSciences | Eiger Biopharmaceutica vs. Cingulate |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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