Correlation Between Stag Industrial and Ecopetrol
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and Ecopetrol 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 Stag Industrial and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and Ecopetrol SA, you can compare the effects of market volatilities on Stag Industrial and Ecopetrol 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 Stag Industrial with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and Ecopetrol.
Diversification Opportunities for Stag Industrial and Ecopetrol
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stag and Ecopetrol is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and Ecopetrol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA and Stag Industrial 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 Stag Industrial are associated (or correlated) with Ecopetrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopetrol SA has no effect on the direction of Stag Industrial i.e., Stag Industrial and Ecopetrol go up and down completely randomly.
Pair Corralation between Stag Industrial and Ecopetrol
Assuming the 90 days trading horizon Stag Industrial is expected to generate 3.6 times less return on investment than Ecopetrol. But when comparing it to its historical volatility, Stag Industrial is 1.69 times less risky than Ecopetrol. It trades about 0.18 of its potential returns per unit of risk. Ecopetrol SA is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 728.00 in Ecopetrol SA on October 23, 2024 and sell it today you would earn a total of 84.00 from holding Ecopetrol SA or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. Ecopetrol SA
Performance |
| Timeline |
| Stag Industrial |
| Ecopetrol SA |
Stag Industrial and Ecopetrol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and Ecopetrol
The main advantage of trading using opposite Stag Industrial and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, Ecopetrol 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 Ecopetrol will offset losses from the drop in Ecopetrol's long position.| Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc |
| Ecopetrol vs. ARDAGH METAL PACDL 0001 | Ecopetrol vs. Stag Industrial | Ecopetrol vs. SLR Investment Corp | Ecopetrol vs. MidCap Financial Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| CEOs Directory Screen CEOs from public companies around the world |