Correlation Between Ecopetrol and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Peninsula 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopetrol SA and Peninsula Energy Limited, you can compare the effects of market volatilities on Ecopetrol and Peninsula 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Peninsula Energy.
Diversification Opportunities for Ecopetrol and Peninsula Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecopetrol and Peninsula is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula 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 are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Ecopetrol i.e., Ecopetrol and Peninsula Energy go up and down completely randomly.
Pair Corralation between Ecopetrol and Peninsula Energy
Assuming the 90 days trading horizon Ecopetrol SA is expected to generate 0.41 times more return on investment than Peninsula Energy. However, Ecopetrol SA is 2.47 times less risky than Peninsula Energy. It trades about 0.24 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about 0.0 per unit of risk. If you would invest 790.00 in Ecopetrol SA on November 7, 2024 and sell it today you would earn a total of 112.00 from holding Ecopetrol SA or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Ecopetrol SA vs. Peninsula Energy Limited
Performance |
| Timeline |
| Ecopetrol SA |
| Peninsula Energy |
Ecopetrol and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Peninsula Energy
The main advantage of trading using opposite Ecopetrol and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Peninsula 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| Ecopetrol vs. NORTHEAST UTILITIES | Ecopetrol vs. Infrastrutture Wireless Italiane | Ecopetrol vs. Spirent Communications plc | Ecopetrol vs. Silicon Motion Technology |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Vale SA | Peninsula Energy vs. Vale SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |