Correlation Between Ecopetrol and SIKA AG
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and SIKA AG 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 SIKA AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopetrol SA and SIKA AG UNSPADR, you can compare the effects of market volatilities on Ecopetrol and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and SIKA AG.
Diversification Opportunities for Ecopetrol and SIKA AG
Very good diversification
The 3 months correlation between Ecopetrol and SIKA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Ecopetrol i.e., Ecopetrol and SIKA AG go up and down completely randomly.
Pair Corralation between Ecopetrol and SIKA AG
Assuming the 90 days trading horizon Ecopetrol SA is expected to generate 1.18 times more return on investment than SIKA AG. However, Ecopetrol is 1.18 times more volatile than SIKA AG UNSPADR. It trades about -0.02 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about -0.03 per unit of risk. If you would invest 1,033 in Ecopetrol SA on November 7, 2024 and sell it today you would lose (115.00) from holding Ecopetrol SA or give up 11.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopetrol SA vs. SIKA AG UNSPADR
Performance |
| Timeline |
| Ecopetrol SA |
| SIKA AG UNSPADR |
Ecopetrol and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and SIKA AG
The main advantage of trading using opposite Ecopetrol and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| Ecopetrol vs. CSSC Offshore Marine | Ecopetrol vs. LG Display Co | Ecopetrol vs. ePlay Digital | Ecopetrol vs. SBM OFFSHORE |
| SIKA AG vs. BII Railway Transportation | SIKA AG vs. PLAYMATES TOYS | SIKA AG vs. PARKEN Sport Entertainment | SIKA AG vs. Yuexiu Transport Infrastructure |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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