Correlation Between Oatly Group and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett, you can compare the effects of market volatilities on Oatly Group and Douglas Emmett 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 Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Douglas Emmett.
Diversification Opportunities for Oatly Group and Douglas Emmett
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oatly and Douglas is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett 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 Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Oatly Group i.e., Oatly Group and Douglas Emmett go up and down completely randomly.
Pair Corralation between Oatly Group and Douglas Emmett
Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.38 times more return on investment than Douglas Emmett. However, Oatly Group is 1.38 times more volatile than Douglas Emmett. It trades about -0.08 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.31 per unit of risk. If you would invest 70.00 in Oatly Group AB on October 13, 2024 and sell it today you would lose (5.00) from holding Oatly Group AB or give up 7.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Oatly Group AB vs. Douglas Emmett
Performance |
Timeline |
Oatly Group AB |
Douglas Emmett |
Oatly Group and Douglas Emmett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oatly Group and Douglas Emmett
The main advantage of trading using opposite Oatly Group and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Douglas Emmett 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 Douglas Emmett will offset losses from the drop in Douglas Emmett's long position.Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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