Correlation Between Oatly Group and DigiCom Berhad
Can any of the company-specific risk be diversified away by investing in both Oatly Group and DigiCom Berhad 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 DigiCom Berhad 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 DigiCom Berhad, you can compare the effects of market volatilities on Oatly Group and DigiCom Berhad 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 DigiCom Berhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and DigiCom Berhad.
Diversification Opportunities for Oatly Group and DigiCom Berhad
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oatly and DigiCom is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and DigiCom Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiCom Berhad 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 DigiCom Berhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiCom Berhad has no effect on the direction of Oatly Group i.e., Oatly Group and DigiCom Berhad go up and down completely randomly.
Pair Corralation between Oatly Group and DigiCom Berhad
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the DigiCom Berhad. In addition to that, Oatly Group is 10.49 times more volatile than DigiCom Berhad. It trades about 0.0 of its total potential returns per unit of risk. DigiCom Berhad is currently generating about 0.12 per unit of volatility. If you would invest 69.00 in DigiCom Berhad on September 3, 2024 and sell it today you would earn a total of 6.00 from holding DigiCom Berhad or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.89% |
| Values | Daily Returns |
Oatly Group AB vs. DigiCom Berhad
Performance |
| Timeline |
| Oatly Group AB |
| DigiCom Berhad |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oatly Group and DigiCom Berhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and DigiCom Berhad
The main advantage of trading using opposite Oatly Group and DigiCom Berhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, DigiCom Berhad 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 DigiCom Berhad will offset losses from the drop in DigiCom Berhad's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| DigiCom Berhad vs. PennantPark Investment | DigiCom Berhad vs. Xponential Fitness | DigiCom Berhad vs. HUTCHMED DRC | DigiCom Berhad vs. RadNet Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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