Correlation Between YPF SA and Bolsas Y

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

By analyzing existing cross correlation between YPF SA D and Bolsas y Mercados, you can compare the effects of market volatilities on YPF SA and Bolsas Y 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 SA with a short position of Bolsas Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF SA and Bolsas Y.

Diversification Opportunities for YPF SA and Bolsas Y

0.62

Correlation Coefficient

YPF SA  Bolsas Y

Poor diversification

The 3 months correlation between YPF and Bolsas is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding YPF SA D and Bolsas y Mercados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsas y Mercados and YPF SA 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 SA D are associated (or correlated) with Bolsas Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsas y Mercados has no effect on the direction of YPF SA i.e., YPF SA and Bolsas Y go up and down completely randomly.

Pair Corralation between YPF SA and Bolsas Y

Assuming the 90 days trading horizon YPF SA D is expected to under-perform the Bolsas Y. But the stock apears to be less risky and, when comparing its historical volatility, YPF SA D is 1.1 times less risky than Bolsas Y. The stock trades about -0.03 of its potential returns per unit of risk. The Bolsas y Mercados is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  47,150  in Bolsas y Mercados on December 30, 2024 and sell it today you would lose (2,500) from holding Bolsas y Mercados or give up 5.3% of portfolio value over 90 days.

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

YPF SA D  vs.  Bolsas y Mercados

YPF SA D

Risk-Adjusted Performance

Very Weak

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

Bolsas y Mercados

Risk-Adjusted Performance

Very Weak

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

Pair Trading with YPF SA and Bolsas Y

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

The idea behind YPF SA D and Bolsas y Mercados 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.