Correlation Between YPF Sociedad and Surge Energy

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

Diversification Opportunities for YPF Sociedad and Surge Energy

0.23

Correlation Coefficient

YPF Sociedad  Surge Energy

Modest diversification

The 3 months correlation between YPF and Surge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Anonima and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and Surge Energy go up and down completely randomly.

Pair Corralation between YPF Sociedad and Surge Energy

Considering the 90-day investment horizon YPF Sociedad Anonima is expected to under-perform the Surge Energy. In addition to that, YPF Sociedad is 1.11 times more volatile than Surge Energy. It trades about -0.08 of its total potential returns per unit of risk. Surge Energy is currently generating about -0.05 per unit of volatility. If you would invest  405.00  in Surge Energy on November 29, 2024 and sell it today you would lose (30.00) from holding Surge Energy or give up 7.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

YPF Sociedad Anonima  vs.  Surge 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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Surge Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surge Energy 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.

Pair Trading with YPF Sociedad and Surge Energy

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

The idea behind YPF Sociedad Anonima and Surge 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.