Correlation Between Antero Resources and YPF Sociedad

Can any of the company-specific risk be diversified away by investing in both Antero Resources 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 Antero Resources and YPF Sociedad into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Antero Resources Corp and YPF Sociedad Anonima, you can compare the effects of market volatilities on Antero Resources 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 Antero Resources with a short position of YPF Sociedad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antero Resources and YPF Sociedad.

Diversification Opportunities for Antero Resources and YPF Sociedad

0.79

Correlation Coefficient

Antero Resources  YPF Sociedad

Poor diversification

The 3 months correlation between Antero and YPF is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Antero Resources Corp 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 Antero Resources 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 Antero Resources Corp 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 Antero Resources i.e., Antero Resources and YPF Sociedad go up and down completely randomly.

Pair Corralation between Antero Resources and YPF Sociedad

Allowing for the 90-day total investment horizon Antero Resources is expected to generate 2.41 times less return on investment than YPF Sociedad. In addition to that, Antero Resources is 1.05 times more volatile than YPF Sociedad Anonima. It trades about 0.14 of its total potential returns per unit of risk. YPF Sociedad Anonima is currently generating about 0.36 per unit of volatility. If you would invest  2,325  in YPF Sociedad Anonima on September 3, 2024 and sell it today you would earn a total of  1,697  from holding YPF Sociedad Anonima or generate 72.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Antero Resources Corp  vs.  YPF Sociedad Anonima

Antero Resources Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Antero Resources Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Antero Resources reported solid returns over the last few months and may actually be approaching a breakup point.

YPF Sociedad Anonima

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in YPF Sociedad Anonima are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, YPF Sociedad reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Antero Resources and YPF Sociedad

The main advantage of trading using opposite Antero Resources and YPF Sociedad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antero Resources 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.

The idea behind Antero Resources Corp and YPF Sociedad Anonima 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.