Correlation Between Stepstone and YPF Sociedad
Can any of the company-specific risk be diversified away by investing in both Stepstone and YPF Sociedad 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 Stepstone and YPF Sociedad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and YPF Sociedad Anonima, you can compare the effects of market volatilities on Stepstone and YPF Sociedad 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 Stepstone with a short position of YPF Sociedad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and YPF Sociedad.
Diversification Opportunities for Stepstone and YPF Sociedad
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stepstone and YPF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and YPF Sociedad Anonima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YPF Sociedad Anonima and Stepstone 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 Stepstone Group are associated (or correlated) with YPF Sociedad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YPF Sociedad Anonima has no effect on the direction of Stepstone i.e., Stepstone and YPF Sociedad go up and down completely randomly.
Pair Corralation between Stepstone and YPF Sociedad
Given the investment horizon of 90 days Stepstone is expected to generate 2.63 times less return on investment than YPF Sociedad. But when comparing it to its historical volatility, Stepstone Group is 1.16 times less risky than YPF Sociedad. It trades about 0.16 of its potential returns per unit of risk. YPF Sociedad Anonima is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,325 in YPF Sociedad Anonima on September 2, 2024 and sell it today you would earn a total of 1,705 from holding YPF Sociedad Anonima or generate 73.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. YPF Sociedad Anonima
Performance |
| Timeline |
| Stepstone Group |
| YPF Sociedad Anonima |
Stepstone and YPF Sociedad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and YPF Sociedad
The main advantage of trading using opposite Stepstone and YPF Sociedad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, YPF Sociedad 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 Sociedad will offset losses from the drop in YPF Sociedad's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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