Correlation Between Oatly Group and TWFG,

Can any of the company-specific risk be diversified away by investing in both Oatly Group and TWFG, 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 TWFG, 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 TWFG, Class A, you can compare the effects of market volatilities on Oatly Group and TWFG, 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 TWFG,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and TWFG,.

Diversification Opportunities for Oatly Group and TWFG,

-0.29

Correlation Coefficient

Oatly Group  TWFG,

Very good diversification

The 3 months correlation between Oatly and TWFG, is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of Oatly Group i.e., Oatly Group and TWFG, go up and down completely randomly.

Pair Corralation between Oatly Group and TWFG,

Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.5 times more return on investment than TWFG,. However, Oatly Group is 1.5 times more volatile than TWFG, Class A. It trades about -0.11 of its potential returns per unit of risk. TWFG, Class A is currently generating about -0.42 per unit of risk. If you would invest  70.00  in Oatly Group AB on September 29, 2024 and sell it today you would lose (6.00) from holding Oatly Group AB or give up 8.57% of portfolio value over 90 days.

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

Oatly Group AB  vs.  TWFG, Class A

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.

TWFG, Class A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, TWFG, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Oatly Group and TWFG,

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

The idea behind Oatly Group AB and TWFG, Class A 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.