Correlation Between YPF SA and American Express
Can any of the company-specific risk be diversified away by investing in both YPF SA and American Express 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 SA and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YPF SA D and American Express Co, you can compare the effects of market volatilities on YPF SA and American Express 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 SA with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF SA and American Express.
Diversification Opportunities for YPF SA and American Express
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YPF and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding YPF SA D and American Express Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and YPF SA 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 SA D are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of YPF SA i.e., YPF SA and American Express go up and down completely randomly.
Pair Corralation between YPF SA and American Express
Assuming the 90 days trading horizon YPF SA D is expected to generate 1.43 times more return on investment than American Express. However, YPF SA is 1.43 times more volatile than American Express Co. It trades about 0.18 of its potential returns per unit of risk. American Express Co is currently generating about 0.08 per unit of risk. If you would invest 3,042,500 in YPF SA D on November 2, 2024 and sell it today you would earn a total of 1,702,500 from holding YPF SA D or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
YPF SA D vs. American Express Co
Performance |
| Timeline |
| YPF SA D |
| American Express |
YPF SA and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YPF SA and American Express
The main advantage of trading using opposite YPF SA and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YPF SA position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.| YPF SA vs. Grupo Financiero Galicia | YPF SA vs. Pampa Energia SA | YPF SA vs. Banco Macro SA | YPF SA vs. Aluar Aluminio Argentino |
| American Express vs. Transportadora de Gas | American Express vs. Agrometal SAI | American Express vs. Harmony Gold Mining | American Express vs. Telecom Argentina |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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