Correlation Between Pampa Energia and YPF SA
Can any of the company-specific risk be diversified away by investing in both Pampa Energia 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 Pampa Energia and YPF SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Energia SA and YPF SA D, you can compare the effects of market volatilities on Pampa Energia 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 Pampa Energia with a short position of YPF SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and YPF SA.
Diversification Opportunities for Pampa Energia and YPF SA
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pampa and YPF is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA 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 Pampa Energia 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 Pampa Energia SA 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 Pampa Energia i.e., Pampa Energia and YPF SA go up and down completely randomly.
Pair Corralation between Pampa Energia and YPF SA
Assuming the 90 days trading horizon Pampa Energia is expected to generate 1.41 times less return on investment than YPF SA. In addition to that, Pampa Energia is 1.33 times more volatile than YPF SA D. It trades about 0.08 of its total potential returns per unit of risk. YPF SA D is currently generating about 0.14 per unit of volatility. If you would invest 4,785,000 in YPF SA D on October 20, 2024 and sell it today you would earn a total of 265,000 from holding YPF SA D or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Pampa Energia SA vs. YPF SA D
Performance |
| Timeline |
| Pampa Energia SA |
| YPF SA D |
Pampa Energia and YPF SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and YPF SA
The main advantage of trading using opposite Pampa Energia and YPF SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia 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.| Pampa Energia vs. Compania de Transporte | Pampa Energia vs. United States Steel | Pampa Energia vs. Agrometal SAI | Pampa Energia vs. Transportadora de Gas |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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