Correlation Between Ecopetrol and FRACTAL GAMING

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

Diversification Opportunities for Ecopetrol and FRACTAL GAMING

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Ecopetrol and FRACTAL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ecopetrol SA and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of Ecopetrol i.e., Ecopetrol and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between Ecopetrol and FRACTAL GAMING

Assuming the 90 days trading horizon Ecopetrol is expected to generate 1.7 times less return on investment than FRACTAL GAMING. In addition to that, Ecopetrol is 1.57 times more volatile than FRACTAL GAMING GROUP. It trades about 0.1 of its total potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.28 per unit of volatility. If you would invest  270.00  in FRACTAL GAMING GROUP on October 9, 2024 and sell it today you would earn a total of  30.00  from holding FRACTAL GAMING GROUP or generate 11.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Ecopetrol SA  vs.  FRACTAL GAMING GROUP

 Performance 
       Timeline  
Ecopetrol SA 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Ecopetrol SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Ecopetrol is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
FRACTAL GAMING GROUP 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FRACTAL GAMING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ecopetrol and FRACTAL GAMING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ecopetrol and FRACTAL GAMING

The main advantage of trading using opposite Ecopetrol and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopetrol position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.
The idea behind Ecopetrol SA and FRACTAL GAMING GROUP 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals