Correlation Between Ecopetrol and Perusahaan Perseroan
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and Perusahaan Perseroan 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 Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopetrol SA and Perusahaan Perseroan PT, you can compare the effects of market volatilities on Ecopetrol and Perusahaan Perseroan 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 Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and Perusahaan Perseroan.
Diversification Opportunities for Ecopetrol and Perusahaan Perseroan
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ecopetrol and Perusahaan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan 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 Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Ecopetrol i.e., Ecopetrol and Perusahaan Perseroan go up and down completely randomly.
Pair Corralation between Ecopetrol and Perusahaan Perseroan
Assuming the 90 days trading horizon Ecopetrol is expected to generate 1.88 times less return on investment than Perusahaan Perseroan. But when comparing it to its historical volatility, Ecopetrol SA is 1.19 times less risky than Perusahaan Perseroan. It trades about 0.07 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,620 in Perusahaan Perseroan PT on September 9, 2025 and sell it today you would earn a total of 250.00 from holding Perusahaan Perseroan PT or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopetrol SA vs. Perusahaan Perseroan PT
Performance |
| Timeline |
| Ecopetrol SA |
| Perusahaan Perseroan |
Ecopetrol and Perusahaan Perseroan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopetrol and Perusahaan Perseroan
The main advantage of trading using opposite Ecopetrol and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.| Ecopetrol vs. GAMING FAC SA | Ecopetrol vs. Scientific Games | Ecopetrol vs. BOSTON BEER A | Ecopetrol vs. BRAGG GAMING GRP |
| Perusahaan Perseroan vs. Tamburi Investment Partners | Perusahaan Perseroan vs. ECHO INVESTMENT ZY | Perusahaan Perseroan vs. Odyssean Investment Trust | Perusahaan Perseroan vs. Corporate Office Properties |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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