Correlation Between Oatly Group and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Estee Lauder 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 Estee Lauder 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 Estee Lauder Companies, you can compare the effects of market volatilities on Oatly Group and Estee Lauder 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 Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Estee Lauder.
Diversification Opportunities for Oatly Group and Estee Lauder
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oatly and Estee is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Estee Lauder Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estee Lauder Companies 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 Estee Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estee Lauder Companies has no effect on the direction of Oatly Group i.e., Oatly Group and Estee Lauder go up and down completely randomly.
Pair Corralation between Oatly Group and Estee Lauder
Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.42 times more return on investment than Estee Lauder. However, Oatly Group is 1.42 times more volatile than Estee Lauder Companies. It trades about -0.06 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about -0.13 per unit of risk. If you would invest 107.00 in Oatly Group AB on September 1, 2024 and sell it today you would lose (37.00) from holding Oatly Group AB or give up 34.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Estee Lauder Companies
Performance |
| Timeline |
| Oatly Group AB |
| Estee Lauder Companies |
Oatly Group and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Estee Lauder
The main advantage of trading using opposite Oatly Group and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Estee Lauder 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 Estee Lauder will offset losses from the drop in Estee Lauder's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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