Correlation Between EON Resources and YPF Sociedad

Can any of the company-specific risk be diversified away by investing in both EON 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 EON 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 EON Resources and YPF Sociedad Anonima, you can compare the effects of market volatilities on EON 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 EON Resources with a short position of YPF Sociedad. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON Resources and YPF Sociedad.

Diversification Opportunities for EON Resources and YPF Sociedad

0.68

Correlation Coefficient

EON Resources  YPF Sociedad

Poor diversification

The 3 months correlation between EON and YPF is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources 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 EON 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 EON Resources 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 EON Resources i.e., EON Resources and YPF Sociedad go up and down completely randomly.

Pair Corralation between EON Resources and YPF Sociedad

Given the investment horizon of 90 days EON Resources is expected to generate 3.74 times more return on investment than YPF Sociedad. However, EON Resources is 3.74 times more volatile than YPF Sociedad Anonima. It trades about 0.03 of its potential returns per unit of risk. YPF Sociedad Anonima is currently generating about -0.09 per unit of risk. If you would invest  65.00  in EON Resources on December 26, 2024 and sell it today you would lose (6.00) from holding EON Resources or give up 9.23% of portfolio value over 90 days.

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

EON Resources  vs.  YPF Sociedad Anonima

EON Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EON Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, EON Resources reported solid returns over the last few months and may actually be approaching a breakup point.

YPF Sociedad Anonima

Risk-Adjusted Performance

Very Weak

Over the last 90 days YPF Sociedad Anonima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EON Resources and YPF Sociedad

The main advantage of trading using opposite EON Resources and YPF Sociedad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON 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 EON Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.