Correlation Between Oatly Group and Deluxe
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Deluxe 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 Deluxe 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 Deluxe, you can compare the effects of market volatilities on Oatly Group and Deluxe 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 Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Deluxe.
Diversification Opportunities for Oatly Group and Deluxe
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oatly and Deluxe is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Oatly Group i.e., Oatly Group and Deluxe go up and down completely randomly.
Pair Corralation between Oatly Group and Deluxe
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Deluxe. In addition to that, Oatly Group is 1.95 times more volatile than Deluxe. It trades about -0.07 of its total potential returns per unit of risk. Deluxe is currently generating about 0.31 per unit of volatility. If you would invest 1,897 in Deluxe on August 30, 2024 and sell it today you would earn a total of 430.00 from holding Deluxe or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Deluxe
Performance |
| Timeline |
| Oatly Group AB |
| Deluxe |
Oatly Group and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Deluxe
The main advantage of trading using opposite Oatly Group and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Deluxe vs. MSA Safety | Deluxe vs. Resideo Technologies | Deluxe vs. Mistras Group | Deluxe vs. NL Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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