Correlation Between YPF Sociedad and Northern Minerals
Can any of the company-specific risk be diversified away by investing in both YPF Sociedad and Northern Minerals 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 Northern Minerals 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 Northern Minerals Exploration, you can compare the effects of market volatilities on YPF Sociedad and Northern Minerals 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 Northern Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF Sociedad and Northern Minerals.
Diversification Opportunities for YPF Sociedad and Northern Minerals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between YPF and Northern is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima and Northern Minerals Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Minerals 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 Northern Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Minerals has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and Northern Minerals go up and down completely randomly.
Pair Corralation between YPF Sociedad and Northern Minerals
Considering the 90-day investment horizon YPF Sociedad is expected to generate 5.34 times less return on investment than Northern Minerals. But when comparing it to its historical volatility, YPF Sociedad Anonima is 6.05 times less risky than Northern Minerals. It trades about 0.11 of its potential returns per unit of risk. Northern Minerals Exploration is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Northern Minerals Exploration on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Northern Minerals Exploration or generate 157.14% 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. Northern Minerals Exploration
Performance |
| Timeline |
| YPF Sociedad Anonima |
| Northern Minerals |
YPF Sociedad and Northern Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YPF Sociedad and Northern Minerals
The main advantage of trading using opposite YPF Sociedad and Northern Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YPF Sociedad position performs unexpectedly, Northern Minerals 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 Northern Minerals will offset losses from the drop in Northern Minerals' long position.| YPF Sociedad vs. Eshallgo Class A | YPF Sociedad vs. Amtech Systems | YPF Sociedad vs. Gold Fields Ltd | YPF Sociedad vs. Aegean Airlines SA |
| Northern Minerals vs. Petroleo Brasileiro Petrobras | Northern Minerals vs. Equinor ASA ADR | Northern Minerals vs. Eni SpA ADR | Northern Minerals 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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