Correlation Between Oatly Group and ECD Automotive
Can any of the company-specific risk be diversified away by investing in both Oatly Group and ECD Automotive 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 ECD Automotive 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 ECD Automotive Design, you can compare the effects of market volatilities on Oatly Group and ECD Automotive 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 ECD Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and ECD Automotive.
Diversification Opportunities for Oatly Group and ECD Automotive
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oatly and ECD is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and ECD Automotive Design in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECD Automotive Design 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 ECD Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECD Automotive Design has no effect on the direction of Oatly Group i.e., Oatly Group and ECD Automotive go up and down completely randomly.
Pair Corralation between Oatly Group and ECD Automotive
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the ECD Automotive. In addition to that, Oatly Group is 1.28 times more volatile than ECD Automotive Design. It trades about -0.06 of its total potential returns per unit of risk. ECD Automotive Design is currently generating about -0.02 per unit of volatility. If you would invest 102.00 in ECD Automotive Design on August 29, 2024 and sell it today you would lose (4.00) from holding ECD Automotive Design or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. ECD Automotive Design
Performance |
| Timeline |
| Oatly Group AB |
| ECD Automotive Design |
Oatly Group and ECD Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and ECD Automotive
The main advantage of trading using opposite Oatly Group and ECD Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, ECD Automotive 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 ECD Automotive will offset losses from the drop in ECD Automotive's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| ECD Automotive vs. Bel Fuse A | ECD Automotive vs. QuickLogic | ECD Automotive vs. Treasury Wine Estates | ECD Automotive vs. Arrow Electronics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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