Correlation Between Fevertree Drinks and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks Plc and Oatly Group AB, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Oatly Group.
Diversification Opportunities for Fevertree Drinks and Oatly Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fevertree and Oatly is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc 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 Fevertree Drinks 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 Fevertree Drinks Plc 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 Fevertree Drinks i.e., Fevertree Drinks and Oatly Group go up and down completely randomly.
Pair Corralation between Fevertree Drinks and Oatly Group
Assuming the 90 days horizon Fevertree Drinks Plc is expected to generate 1.69 times more return on investment than Oatly Group. However, Fevertree Drinks is 1.69 times more volatile than Oatly Group AB. It trades about 0.13 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.22 per unit of risk. If you would invest 849.00 in Fevertree Drinks Plc on November 3, 2024 and sell it today you would earn a total of 111.00 from holding Fevertree Drinks Plc or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks Plc vs. Oatly Group AB
Performance |
| Timeline |
| Fevertree Drinks Plc |
| Oatly Group AB |
Fevertree Drinks and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and Oatly Group
The main advantage of trading using opposite Fevertree Drinks and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Celsius Holdings | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Coca Cola Femsa SAB |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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