Correlation Between ReWalk Robotics and Oatly Group

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

By analyzing existing cross correlation between ReWalk Robotics and Oatly Group AB, you can compare the effects of market volatilities on ReWalk Robotics and Oatly Group 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 ReWalk Robotics with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReWalk Robotics and Oatly Group.

Diversification Opportunities for ReWalk Robotics and Oatly Group

0.84

Correlation Coefficient

ReWalk Robotics  Oatly Group

Very poor diversification

The 3 months correlation between ReWalk and Oatly is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ReWalk Robotics and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB and ReWalk Robotics 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 ReWalk Robotics are associated (or correlated) with Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of ReWalk Robotics i.e., ReWalk Robotics and Oatly Group go up and down completely randomly.

Pair Corralation between ReWalk Robotics and Oatly Group

Given the investment horizon of 90 days ReWalk Robotics is expected to under-perform the Oatly Group. But the stock apears to be less risky and, when comparing its historical volatility, ReWalk Robotics is 1.12 times less risky than Oatly Group. The stock trades about -0.25 of its potential returns per unit of risk. The Oatly Group AB is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  92.00  in Oatly Group AB on September 21, 2024 and sell it today you would lose (30.57) from holding Oatly Group AB or give up 33.23% of portfolio value over 90 days.

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

ReWalk Robotics  vs.  Oatly Group AB

ReWalk Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ReWalk Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Oatly Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oatly Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ReWalk Robotics and Oatly Group

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

The idea behind ReWalk Robotics and Oatly Group AB 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.