Correlation Between Ecopetrol and AiXin Life

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ecopetrol and AiXin Life 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 AiXin Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopetrol SA ADR and AiXin Life International, you can compare the effects of market volatilities on Ecopetrol and AiXin Life 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 AiXin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopetrol and AiXin Life.

Diversification Opportunities for Ecopetrol and AiXin Life

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ecopetrol and AiXin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA ADR and AiXin Life International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiXin Life International 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 ADR are associated (or correlated) with AiXin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiXin Life International has no effect on the direction of Ecopetrol i.e., Ecopetrol and AiXin Life go up and down completely randomly.

Pair Corralation between Ecopetrol and AiXin Life

Allowing for the 90-day total investment horizon Ecopetrol SA ADR is expected to under-perform the AiXin Life. But the stock apears to be less risky and, when comparing its historical volatility, Ecopetrol SA ADR is 66.92 times less risky than AiXin Life. The stock trades about -0.07 of its potential returns per unit of risk. The AiXin Life International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  27.00  in AiXin Life International on September 12, 2024 and sell it today you would lose (25.30) from holding AiXin Life International or give up 93.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ecopetrol SA ADR  vs.  AiXin Life International

 Performance 
       Timeline  
Ecopetrol SA ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ecopetrol SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
AiXin Life International 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AiXin Life International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AiXin Life displayed solid returns over the last few months and may actually be approaching a breakup point.

Ecopetrol and AiXin Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ecopetrol and AiXin Life

The main advantage of trading using opposite Ecopetrol and AiXin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, AiXin Life 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 AiXin Life will offset losses from the drop in AiXin Life's long position.
The idea behind Ecopetrol SA ADR and AiXin Life International 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.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules