Correlation Between Repsol SA and YPF SA

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

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

Diversification Opportunities for Repsol SA and YPF SA

0.09

Correlation Coefficient

Repsol SA  YPF SA

Significant diversification

The 3 months correlation between Repsol and YPF is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA 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 Repsol 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 Repsol SA 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 Repsol SA i.e., Repsol SA and YPF SA go up and down completely randomly.

Pair Corralation between Repsol SA and YPF SA

Assuming the 90 days trading horizon Repsol SA is not expected to generate positive returns. However, Repsol SA is 191.97 times less risky than YPF SA. It waists most of its returns potential to compensate for thr risk taken. YPF SA is generating about 0.07 per unit of risk. If you would invest  3,622,500  in YPF SA D on April 21, 2025 and sell it today you would earn a total of  370,000  from holding YPF SA D or generate 10.21% return on investment over 90 days.

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

Repsol SA  vs.  YPF SA D

Repsol SA

Risk-Adjusted Performance

Very Weak

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

YPF SA D

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YPF SA D are ranked lower than 5 (%) 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 Repsol SA and YPF SA

The main advantage of trading using opposite Repsol SA and YPF SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA 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 Repsol SA 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.