Correlation Between Bet At and Ecopetrol

Can any of the company-specific risk be diversified away by investing in both Bet At 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 Bet At and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between bet at home AG and Ecopetrol SA, you can compare the effects of market volatilities on Bet At 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 Bet At with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Ecopetrol.

Diversification Opportunities for Bet At and Ecopetrol

0.0

Correlation Coefficient

Bet At  Ecopetrol

Pay attention - limited upside

The 3 months correlation between Bet and Ecopetrol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Ecopetrol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA and Bet At 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 bet at home AG 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 Bet At i.e., Bet At and Ecopetrol go up and down completely randomly.

Pair Corralation between Bet At and Ecopetrol

If you would invest  756.00  in Ecopetrol SA on October 4, 2024 and sell it today you would earn a total of  48.00  from holding Ecopetrol SA or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

bet at home AG  vs.  Ecopetrol SA

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bet At is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ecopetrol SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecopetrol SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Ecopetrol is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bet At and Ecopetrol

The main advantage of trading using opposite Bet At and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At 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.

The idea behind bet at home AG and Ecopetrol SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.