Correlation Between Suncor Energy and YPF Sociedad
Can any of the company-specific risk be diversified away by investing in both Suncor Energy 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 Suncor Energy and YPF Sociedad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and YPF Sociedad Anonima, you can compare the effects of market volatilities on Suncor Energy 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 Suncor Energy with a short position of YPF Sociedad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and YPF Sociedad.
Diversification Opportunities for Suncor Energy and YPF Sociedad
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suncor and YPF is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy 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 Suncor Energy 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 Suncor Energy 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 Suncor Energy i.e., Suncor Energy and YPF Sociedad go up and down completely randomly.
Pair Corralation between Suncor Energy and YPF Sociedad
Allowing for the 90-day total investment horizon Suncor Energy is expected to under-perform the YPF Sociedad. But the stock apears to be less risky and, when comparing its historical volatility, Suncor Energy is 2.3 times less risky than YPF Sociedad. The stock trades about -0.65 of its potential returns per unit of risk. The YPF Sociedad Anonima is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,926 in YPF Sociedad Anonima on September 24, 2024 and sell it today you would earn a total of 276.00 from holding YPF Sociedad Anonima or generate 7.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Suncor Energy vs. YPF Sociedad Anonima
Performance |
Timeline |
Suncor Energy |
YPF Sociedad Anonima |
Suncor Energy and YPF Sociedad Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suncor Energy and YPF Sociedad
The main advantage of trading using opposite Suncor Energy and YPF Sociedad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy 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.Suncor Energy vs. Shell PLC ADR | Suncor Energy vs. Cenovus Energy | Suncor Energy vs. Petrleo Brasileiro SA |
YPF Sociedad vs. Shell PLC ADR | YPF Sociedad vs. Suncor Energy | YPF Sociedad vs. Cenovus Energy | YPF Sociedad vs. Petrleo Brasileiro SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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