Correlation Between Oatly Group and Ecolab
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Ecolab 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 Ecolab 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 Ecolab Inc, you can compare the effects of market volatilities on Oatly Group and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Ecolab.
Diversification Opportunities for Oatly Group and Ecolab
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oatly and Ecolab is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Oatly Group i.e., Oatly Group and Ecolab go up and down completely randomly.
Pair Corralation between Oatly Group and Ecolab
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Ecolab. In addition to that, Oatly Group is 3.72 times more volatile than Ecolab Inc. It trades about -0.02 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.1 per unit of volatility. If you would invest 19,050 in Ecolab Inc on September 2, 2024 and sell it today you would earn a total of 5,827 from holding Ecolab Inc or generate 30.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Ecolab Inc
Performance |
| Timeline |
| Oatly Group AB |
| Ecolab Inc |
Oatly Group and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Ecolab
The main advantage of trading using opposite Oatly Group and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Oatly Group vs. Campbell Soup | Oatly Group vs. ConAgra Foods | Oatly Group vs. Hormel Foods | Oatly Group vs. Kellanova |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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