Correlation Between Ingredion Incorporated and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated 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 Ingredion Incorporated and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and Oatly Group AB, you can compare the effects of market volatilities on Ingredion Incorporated 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 Ingredion Incorporated with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and Oatly Group.
Diversification Opportunities for Ingredion Incorporated and Oatly Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingredion and Oatly is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated i.e., Ingredion Incorporated and Oatly Group go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and Oatly Group
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 26.97 times less return on investment than Oatly Group. But when comparing it to its historical volatility, Ingredion Incorporated is 33.07 times less risky than Oatly Group. It trades about 0.05 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Oatly Group AB on November 19, 2024 and sell it today you would earn a total of 770.00 from holding Oatly Group AB or generate 350.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. Oatly Group AB
Performance |
| Timeline |
| Ingredion Incorporated |
| Oatly Group AB |
Ingredion Incorporated and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and Oatly Group
The main advantage of trading using opposite Ingredion Incorporated and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated 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.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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