Correlation Between Ecopetrol and Hookipa Pharma
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Hookipa Pharma 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 Hookipa Pharma 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 Hookipa Pharma, you can compare the effects of market volatilities on Ecopetrol and Hookipa Pharma 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 Hookipa Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Hookipa Pharma.
Diversification Opportunities for Ecopetrol and Hookipa Pharma
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ecopetrol and Hookipa is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and Hookipa Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hookipa Pharma 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 Hookipa Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hookipa Pharma has no effect on the direction of Ecopetrol i.e., Ecopetrol and Hookipa Pharma go up and down completely randomly.
Pair Corralation between Ecopetrol and Hookipa Pharma
Allowing for the 90-day total investment horizon Ecopetrol SA ADR is expected to generate 0.47 times more return on investment than Hookipa Pharma. However, Ecopetrol SA ADR is 2.11 times less risky than Hookipa Pharma. It trades about -0.13 of its potential returns per unit of risk. Hookipa Pharma is currently generating about -0.27 per unit of risk. If you would invest 946.00 in Ecopetrol SA ADR on August 31, 2024 and sell it today you would lose (142.00) from holding Ecopetrol SA ADR or give up 15.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopetrol SA ADR vs. Hookipa Pharma
Performance |
| Timeline |
| Ecopetrol SA ADR |
| Hookipa Pharma |
Ecopetrol and Hookipa Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Hookipa Pharma
The main advantage of trading using opposite Ecopetrol and Hookipa Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Hookipa Pharma 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 Hookipa Pharma will offset losses from the drop in Hookipa Pharma's long position.| Ecopetrol vs. Petroleo Brasileiro Petrobras | Ecopetrol vs. Equinor ASA ADR | Ecopetrol vs. Eni SpA ADR | Ecopetrol vs. Cenovus Energy |
| Hookipa Pharma vs. Mereo BioPharma Group | Hookipa Pharma vs. Terns Pharmaceuticals | Hookipa Pharma vs. PDS Biotechnology Corp | Hookipa Pharma vs. Inozyme Pharma |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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