Correlation Between YPF Sociedad and NIKE

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

By analyzing existing cross correlation between YPF Sociedad Annima and NIKE Inc, you can compare the effects of market volatilities on YPF Sociedad and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of YPF Sociedad and NIKE.

Diversification Opportunities for YPF Sociedad and NIKE

0.0

Correlation Coefficient

YPF Sociedad  NIKE

Pay attention - limited upside

The 3 months correlation between YPF and NIKE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YPF Sociedad Annima and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc 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 Annima are associated (or correlated) with NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc has no effect on the direction of YPF Sociedad i.e., YPF Sociedad and NIKE go up and down completely randomly.

Pair Corralation between YPF Sociedad and NIKE

If you would invest  31,999  in YPF Sociedad Annima on February 3, 2024 and sell it today you would earn a total of  2,521  from holding YPF Sociedad Annima or generate 7.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

YPF Sociedad Annima  vs.  NIKE Inc

YPF Sociedad Annima

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days YPF Sociedad Annima has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, YPF Sociedad showed solid returns over the last few months and may actually be approaching a breakup point.

NIKE Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NIKE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with YPF Sociedad and NIKE

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

The idea behind YPF Sociedad Annima and NIKE Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.