Correlation Between Vista Oil and Impulsora Del

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

By analyzing existing cross correlation between Vista Oil Gas and Impulsora del Desarrollo, you can compare the effects of market volatilities on Vista Oil and Impulsora Del 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 Vista Oil with a short position of Impulsora Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and Impulsora Del.

Diversification Opportunities for Vista Oil and Impulsora Del

0.24

Correlation Coefficient

Vista Oil  Impulsora Del

Modest diversification

The 3 months correlation between Vista and Impulsora is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and Impulsora del Desarrollo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impulsora del Desarrollo and Vista Oil 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 Vista Oil Gas are associated (or correlated) with Impulsora Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impulsora del Desarrollo has no effect on the direction of Vista Oil i.e., Vista Oil and Impulsora Del go up and down completely randomly.

Pair Corralation between Vista Oil and Impulsora Del

Assuming the 90 days trading horizon Vista Oil Gas is expected to generate 8.86 times more return on investment than Impulsora Del. However, Vista Oil is 8.86 times more volatile than Impulsora del Desarrollo. It trades about 0.11 of its potential returns per unit of risk. Impulsora del Desarrollo is currently generating about 0.05 per unit of risk. If you would invest  50,000  in Vista Oil Gas on September 28, 2024 and sell it today you would earn a total of  58,200  from holding Vista Oil Gas or generate 116.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Vista Oil Gas  vs.  Impulsora del Desarrollo

Vista Oil Gas

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Oil Gas are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vista Oil sustained solid returns over the last few months and may actually be approaching a breakup point.

Impulsora del Desarrollo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impulsora del Desarrollo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Impulsora Del is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vista Oil and Impulsora Del

The main advantage of trading using opposite Vista Oil and Impulsora Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, Impulsora Del 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 Impulsora Del will offset losses from the drop in Impulsora Del's long position.

The idea behind Vista Oil Gas and Impulsora del Desarrollo 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.