Correlation Between Oatly Group and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Chipotle Mexican 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 Chipotle Mexican 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 Chipotle Mexican Grill, you can compare the effects of market volatilities on Oatly Group and Chipotle Mexican 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 Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Chipotle Mexican.
Diversification Opportunities for Oatly Group and Chipotle Mexican
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oatly and Chipotle is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Chipotle Mexican Grill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipotle Mexican Grill 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 Chipotle Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipotle Mexican Grill has no effect on the direction of Oatly Group i.e., Oatly Group and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Oatly Group and Chipotle Mexican
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Chipotle Mexican. In addition to that, Oatly Group is 2.18 times more volatile than Chipotle Mexican Grill. It trades about -0.22 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.07 per unit of volatility. If you would invest 5,989 in Chipotle Mexican Grill on November 3, 2024 and sell it today you would lose (154.00) from holding Chipotle Mexican Grill or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oatly Group AB vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Oatly Group AB |
| Chipotle Mexican Grill |
Oatly Group and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Chipotle Mexican
The main advantage of trading using opposite Oatly Group and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Chipotle Mexican 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 Chipotle Mexican will offset losses from the drop in Chipotle Mexican's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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