Correlation Between Oatly Group and Empresa Distribuidora
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Empresa Distribuidora 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 Oatly Group and Empresa Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oatly Group AB and Empresa Distribuidora y, you can compare the effects of market volatilities on Oatly Group and Empresa Distribuidora 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 Oatly Group with a short position of Empresa Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Empresa Distribuidora.
Diversification Opportunities for Oatly Group and Empresa Distribuidora
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oatly and Empresa is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Empresa Distribuidora y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Distribuidora and Oatly Group 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 Oatly Group AB are associated (or correlated) with Empresa Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Distribuidora has no effect on the direction of Oatly Group i.e., Oatly Group and Empresa Distribuidora go up and down completely randomly.
Pair Corralation between Oatly Group and Empresa Distribuidora
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Empresa Distribuidora. In addition to that, Oatly Group is 1.46 times more volatile than Empresa Distribuidora y. It trades about -0.14 of its total potential returns per unit of risk. Empresa Distribuidora y is currently generating about 0.35 per unit of volatility. If you would invest 2,285 in Empresa Distribuidora y on September 26, 2024 and sell it today you would earn a total of 2,165 from holding Empresa Distribuidora y or generate 94.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Oatly Group AB vs. Empresa Distribuidora y
Performance |
Timeline |
Oatly Group AB |
Empresa Distribuidora |
Oatly Group and Empresa Distribuidora Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oatly Group and Empresa Distribuidora
The main advantage of trading using opposite Oatly Group and Empresa Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Empresa Distribuidora 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 Empresa Distribuidora will offset losses from the drop in Empresa Distribuidora's long position.Oatly Group vs. J J Snack | Oatly Group vs. Central Garden Pet | Oatly Group vs. Lancaster Colony | Oatly Group vs. The A2 Milk |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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