Correlation Between Teekay and YPF Sociedad

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

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

Diversification Opportunities for Teekay and YPF Sociedad

0.7

Correlation Coefficient

Teekay  YPF Sociedad

Poor diversification

The 3 months correlation between Teekay and YPF is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Teekay 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 Teekay 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 Teekay 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 Teekay i.e., Teekay and YPF Sociedad go up and down completely randomly.

Pair Corralation between Teekay and YPF Sociedad

Allowing for the 90-day total investment horizon Teekay is expected to generate 0.83 times more return on investment than YPF Sociedad. However, Teekay is 1.2 times less risky than YPF Sociedad. It trades about 0.0 of its potential returns per unit of risk. YPF Sociedad Anonima is currently generating about -0.07 per unit of risk. If you would invest  675.00  in Teekay on December 26, 2024 and sell it today you would lose (8.00) from holding Teekay or give up 1.19% of portfolio value over 90 days.

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

Teekay  vs.  YPF Sociedad Anonima

Teekay

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teekay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Teekay is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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 Teekay and YPF Sociedad

The main advantage of trading using opposite Teekay and YPF Sociedad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teekay 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 Teekay 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.