Correlation Between Atlas Iron and Ecopetrol
Can any of the company-specific risk be diversified away by investing in both Atlas Iron 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 Atlas Iron and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Iron Limited and Ecopetrol SA ADR, you can compare the effects of market volatilities on Atlas Iron 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 Atlas Iron with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Iron and Ecopetrol.
Diversification Opportunities for Atlas Iron and Ecopetrol
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Atlas and Ecopetrol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Iron Limited and Ecopetrol SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA ADR and Atlas Iron 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 Atlas Iron Limited 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 ADR has no effect on the direction of Atlas Iron i.e., Atlas Iron and Ecopetrol go up and down completely randomly.
Pair Corralation between Atlas Iron and Ecopetrol
If you would invest 1,035 in Ecopetrol SA ADR on January 25, 2024 and sell it today you would earn a total of 138.00 from holding Ecopetrol SA ADR or generate 13.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Atlas Iron Limited vs. Ecopetrol SA ADR
Performance |
Timeline |
Atlas Iron Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecopetrol SA ADR |
Atlas Iron and Ecopetrol Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atlas Iron and Ecopetrol
The main advantage of trading using opposite Atlas Iron and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Iron 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.Atlas Iron vs. Kaiser Aluminum | Atlas Iron vs. BlueScope Steel Limited | Atlas Iron vs. Viemed Healthcare | Atlas Iron vs. Teleflex Incorporated |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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