Correlation Between Oatly Group and 12663QAC9

Can any of the company-specific risk be diversified away by investing in both Oatly Group and 12663QAC9 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 12663QAC9 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 US12663QAC96, you can compare the effects of market volatilities on Oatly Group and 12663QAC9 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 12663QAC9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and 12663QAC9.

Diversification Opportunities for Oatly Group and 12663QAC9

0.4

Correlation Coefficient

Oatly Group  12663QAC9

Very weak diversification

The 3 months correlation between Oatly and 12663QAC9 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and US12663QAC96 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US12663QAC96 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 12663QAC9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US12663QAC96 has no effect on the direction of Oatly Group i.e., Oatly Group and 12663QAC9 go up and down completely randomly.

Pair Corralation between Oatly Group and 12663QAC9

Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the 12663QAC9. In addition to that, Oatly Group is 3.73 times more volatile than US12663QAC96. It trades about -0.07 of its total potential returns per unit of risk. US12663QAC96 is currently generating about -0.1 per unit of volatility. If you would invest  9,725  in US12663QAC96 on September 15, 2024 and sell it today you would lose (681.00) from holding US12663QAC96 or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

Oatly Group AB  vs.  US12663QAC96

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.

US12663QAC96

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US12663QAC96 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US12663QAC96 investors.

Pair Trading with Oatly Group and 12663QAC9

The main advantage of trading using opposite Oatly Group and 12663QAC9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, 12663QAC9 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 12663QAC9 will offset losses from the drop in 12663QAC9's long position.

The idea behind Oatly Group AB and US12663QAC96 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.