Correlation Between Ecolab and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Ecolab 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 Ecolab and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Oatly Group AB, you can compare the effects of market volatilities on Ecolab 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 Ecolab with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Oatly Group.
Diversification Opportunities for Ecolab and Oatly Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecolab and Oatly is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc 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 Ecolab 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 Ecolab Inc 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 Ecolab i.e., Ecolab and Oatly Group go up and down completely randomly.
Pair Corralation between Ecolab and Oatly Group
Considering the 90-day investment horizon Ecolab Inc is expected to under-perform the Oatly Group. But the stock apears to be less risky and, when comparing its historical volatility, Ecolab Inc is 1.99 times less risky than Oatly Group. The stock trades about -0.42 of its potential returns per unit of risk. The Oatly Group AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Oatly Group AB on January 8, 2025 and sell it today you would earn a total of 28.00 from holding Oatly Group AB or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Oatly Group AB
Performance |
| Timeline |
| Ecolab Inc |
| Oatly Group AB |
Ecolab and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Oatly Group
The main advantage of trading using opposite Ecolab and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab 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.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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