Correlation Between YPF Sociedad and Isoenergy
Can any of the company-specific risk be diversified away by investing in both YPF Sociedad and Isoenergy 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 Isoenergy 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 Isoenergy, you can compare the effects of market volatilities on YPF Sociedad and Isoenergy 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 Isoenergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF Sociedad and Isoenergy.
Diversification Opportunities for YPF Sociedad and Isoenergy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between YPF and Isoenergy is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima and Isoenergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isoenergy 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 Isoenergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isoenergy has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and Isoenergy go up and down completely randomly.
Pair Corralation between YPF Sociedad and Isoenergy
Considering the 90-day investment horizon YPF Sociedad Anonima is expected to generate 0.81 times more return on investment than Isoenergy. However, YPF Sociedad Anonima is 1.24 times less risky than Isoenergy. It trades about 0.77 of its potential returns per unit of risk. Isoenergy is currently generating about -0.09 per unit of risk. If you would invest 2,551 in YPF Sociedad Anonima on August 28, 2024 and sell it today you would earn a total of 1,452 from holding YPF Sociedad Anonima or generate 56.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YPF Sociedad Anonima vs. Isoenergy
Performance |
| Timeline |
| YPF Sociedad Anonima |
| Isoenergy |
YPF Sociedad and Isoenergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YPF Sociedad and Isoenergy
The main advantage of trading using opposite YPF Sociedad and Isoenergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YPF Sociedad position performs unexpectedly, Isoenergy 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 Isoenergy will offset losses from the drop in Isoenergy's long position.The idea behind YPF Sociedad Anonima and Isoenergy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Isoenergy vs. Petroleo Brasileiro Petrobras | Isoenergy vs. Equinor ASA ADR | Isoenergy vs. Eni SpA ADR | Isoenergy vs. YPF Sociedad Anonima |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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