Correlation Between YPF Sociedad and Freehold Royalties
Can any of the company-specific risk be diversified away by investing in both YPF Sociedad and Freehold Royalties 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 YPF Sociedad and Freehold Royalties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YPF Sociedad Anonima and Freehold Royalties, you can compare the effects of market volatilities on YPF Sociedad and Freehold Royalties 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 YPF Sociedad with a short position of Freehold Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF Sociedad and Freehold Royalties.
Diversification Opportunities for YPF Sociedad and Freehold Royalties
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between YPF and Freehold is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima and Freehold Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freehold Royalties and YPF Sociedad 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 YPF Sociedad Anonima are associated (or correlated) with Freehold Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freehold Royalties has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and Freehold Royalties go up and down completely randomly.
Pair Corralation between YPF Sociedad and Freehold Royalties
Considering the 90-day investment horizon YPF Sociedad Anonima is expected to generate 2.56 times more return on investment than Freehold Royalties. However, YPF Sociedad is 2.56 times more volatile than Freehold Royalties. It trades about 0.8 of its potential returns per unit of risk. Freehold Royalties is currently generating about 0.08 per unit of risk. If you would invest 2,484 in YPF Sociedad Anonima on August 30, 2024 and sell it today you would earn a total of 1,487 from holding YPF Sociedad Anonima or generate 59.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YPF Sociedad Anonima vs. Freehold Royalties
Performance |
| Timeline |
| YPF Sociedad Anonima |
| Freehold Royalties |
YPF Sociedad and Freehold Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YPF Sociedad and Freehold Royalties
The main advantage of trading using opposite YPF Sociedad and Freehold Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YPF Sociedad position performs unexpectedly, Freehold Royalties 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 Freehold Royalties will offset losses from the drop in Freehold Royalties' long position.| YPF Sociedad vs. National Fuel Gas | YPF Sociedad vs. Eni SpA ADR | YPF Sociedad vs. Ecopetrol SA ADR | YPF Sociedad vs. TotalEnergies SE ADR |
| Freehold Royalties vs. PrairieSky Royalty | Freehold Royalties vs. Tamarack Valley Energy | Freehold Royalties vs. MEG Energy Corp | Freehold Royalties vs. Tourmaline Oil Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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