Correlation Between YPF Sociedad and Altura Energy

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

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

Diversification Opportunities for YPF Sociedad and Altura Energy

0.1

Correlation Coefficient

YPF Sociedad  Altura Energy

Average diversification

The 3 months correlation between YPF and Altura is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and YPF Sociedad 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 YPF Sociedad Anonima are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and Altura Energy go up and down completely randomly.

Pair Corralation between YPF Sociedad and Altura Energy

Considering the 90-day investment horizon YPF Sociedad Anonima is expected to under-perform the Altura Energy. But the stock apears to be less risky and, when comparing its historical volatility, YPF Sociedad Anonima is 1.06 times less risky than Altura Energy. The stock trades about -0.06 of its potential returns per unit of risk. The Altura Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Altura Energy on December 27, 2024 and sell it today you would earn a total of  22.00  from holding Altura Energy or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

YPF Sociedad Anonima  vs.  Altura Energy

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Altura Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Altura Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with YPF Sociedad and Altura Energy

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

The idea behind YPF Sociedad Anonima and Altura Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.