Correlation Between Deluxe and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Deluxe 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 Deluxe and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Oatly Group AB, you can compare the effects of market volatilities on Deluxe 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 Deluxe with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Oatly Group.
Diversification Opportunities for Deluxe and Oatly Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deluxe and Oatly is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe 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 Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Oatly Group go up and down completely randomly.
Pair Corralation between Deluxe and Oatly Group
Considering the 90-day investment horizon Deluxe is expected to under-perform the Oatly Group. But the stock apears to be less risky and, when comparing its historical volatility, Deluxe is 2.34 times less risky than Oatly Group. The stock trades about -0.03 of its potential returns per unit of risk. The Oatly Group AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Oatly Group AB on October 25, 2024 and sell it today you would earn a total of 7.20 from holding Oatly Group AB or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Oatly Group AB
Performance |
| Timeline |
| Deluxe |
| Oatly Group AB |
Deluxe and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Oatly Group
The main advantage of trading using opposite Deluxe and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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