Correlation Between Oatly Group and Affiliated Resources
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Affiliated Resources 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 Affiliated Resources 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 Affiliated Resources Corp, you can compare the effects of market volatilities on Oatly Group and Affiliated Resources 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 Affiliated Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Affiliated Resources.
Diversification Opportunities for Oatly Group and Affiliated Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oatly and Affiliated is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp 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 Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of Oatly Group i.e., Oatly Group and Affiliated Resources go up and down completely randomly.
Pair Corralation between Oatly Group and Affiliated Resources
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Affiliated Resources. But the stock apears to be less risky and, when comparing its historical volatility, Oatly Group AB is 1.72 times less risky than Affiliated Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Affiliated Resources Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Affiliated Resources Corp on September 4, 2024 and sell it today you would lose (1.01) from holding Affiliated Resources Corp or give up 10.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Oatly Group AB vs. Affiliated Resources Corp
Performance |
| Timeline |
| Oatly Group AB |
| Affiliated Resources Corp |
Oatly Group and Affiliated Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Affiliated Resources
The main advantage of trading using opposite Oatly Group and Affiliated Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Affiliated Resources 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 Affiliated Resources will offset losses from the drop in Affiliated Resources' long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Affiliated Resources vs. Westrock Coffee | Affiliated Resources vs. National Beverage Corp | Affiliated Resources vs. Oatly Group AB | Affiliated Resources vs. Thai Beverage PCL |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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