Correlation Between Chevron Corp and YPF SA

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

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

Diversification Opportunities for Chevron Corp and YPF SA

-0.02

Correlation Coefficient

Chevron Corp  YPF SA

Good diversification

The 3 months correlation between Chevron and YPF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp CEDEAR and YPF SA D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YPF SA D and Chevron Corp 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 Chevron Corp CEDEAR are associated (or correlated) with YPF SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YPF SA D has no effect on the direction of Chevron Corp i.e., Chevron Corp and YPF SA go up and down completely randomly.

Pair Corralation between Chevron Corp and YPF SA

Assuming the 90 days trading horizon Chevron Corp CEDEAR is expected to generate 0.55 times more return on investment than YPF SA. However, Chevron Corp CEDEAR is 1.82 times less risky than YPF SA. It trades about 0.22 of its potential returns per unit of risk. YPF SA D is currently generating about 0.04 per unit of risk. If you would invest  990,000  in Chevron Corp CEDEAR on April 22, 2025 and sell it today you would earn a total of  207,500  from holding Chevron Corp CEDEAR or generate 20.96% return on investment over 90 days.

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

Chevron Corp CEDEAR  vs.  YPF SA D

Chevron Corp CEDEAR

Risk-Adjusted Performance

Solid

Over the last 90 days Chevron Corp CEDEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Chevron Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

YPF SA D

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YPF SA D are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, YPF SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Chevron Corp and YPF SA

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

The idea behind Chevron Corp CEDEAR and YPF SA D 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.