Correlation Between Oatly Group and Cars
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Oatly Group and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Cars.
Diversification Opportunities for Oatly Group and Cars
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oatly and Cars is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Oatly Group i.e., Oatly Group and Cars go up and down completely randomly.
Pair Corralation between Oatly Group and Cars
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Cars. In addition to that, Oatly Group is 2.21 times more volatile than Cars Inc. It trades about -0.03 of its total potential returns per unit of risk. Cars Inc is currently generating about 0.03 per unit of volatility. If you would invest 1,413 in Cars Inc on September 26, 2024 and sell it today you would earn a total of 323.00 from holding Cars Inc or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Cars Inc
Performance |
| Timeline |
| Oatly Group AB |
| Cars Inc |
Oatly Group and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Cars
The main advantage of trading using opposite Oatly Group and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Oatly Group vs. J J Snack | Oatly Group vs. Central Garden Pet | Oatly Group vs. Lancaster Colony | Oatly Group vs. The A2 Milk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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