Correlation Between BHP Group and YPF SA
Can any of the company-specific risk be diversified away by investing in both BHP Group and YPF SA 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 BHP Group and YPF SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group Limited and YPF SA D, you can compare the effects of market volatilities on BHP Group and YPF SA 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 BHP Group with a short position of YPF SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and YPF SA.
Diversification Opportunities for BHP Group and YPF SA
Pay attention - limited upside
The 3 months correlation between BHP and YPF is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group Limited and YPF SA D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YPF SA D and BHP Group 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 BHP Group Limited are associated (or correlated) with YPF SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YPF SA D has no effect on the direction of BHP Group i.e., BHP Group and YPF SA go up and down completely randomly.
Pair Corralation between BHP Group and YPF SA
Assuming the 90 days trading horizon BHP Group Limited is expected to generate 1.09 times more return on investment than YPF SA. However, BHP Group is 1.09 times more volatile than YPF SA D. It trades about 0.05 of its potential returns per unit of risk. YPF SA D is currently generating about -0.19 per unit of risk. If you would invest 2,885,000 in BHP Group Limited on November 2, 2024 and sell it today you would earn a total of 65,000 from holding BHP Group Limited or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BHP Group Limited vs. YPF SA D
Performance |
| Timeline |
| BHP Group Limited |
| YPF SA D |
BHP Group and YPF SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHP Group and YPF SA
The main advantage of trading using opposite BHP Group and YPF SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group position performs unexpectedly, YPF SA 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 YPF SA will offset losses from the drop in YPF SA's long position.| BHP Group vs. Harmony Gold Mining | BHP Group vs. Compania de Transporte | BHP Group vs. Agrometal SAI | BHP Group vs. United States Steel |
| YPF SA vs. Grupo Financiero Galicia | YPF SA vs. Pampa Energia SA | YPF SA vs. Banco Macro SA | YPF SA vs. Aluar Aluminio Argentino |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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