Correlation Between Oatly Group and EMCOR
Can any of the company-specific risk be diversified away by investing in both Oatly Group and EMCOR 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 EMCOR 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 EMCOR Group, you can compare the effects of market volatilities on Oatly Group and EMCOR 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 EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and EMCOR.
Diversification Opportunities for Oatly Group and EMCOR
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oatly and EMCOR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group 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 EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Oatly Group i.e., Oatly Group and EMCOR go up and down completely randomly.
Pair Corralation between Oatly Group and EMCOR
Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.76 times more return on investment than EMCOR. However, Oatly Group is 1.76 times more volatile than EMCOR Group. It trades about 0.04 of its potential returns per unit of risk. EMCOR Group is currently generating about -0.11 per unit of risk. If you would invest 65.00 in Oatly Group AB on September 19, 2024 and sell it today you would earn a total of 1.00 from holding Oatly Group AB or generate 1.54% 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. EMCOR Group
Performance |
| Timeline |
| Oatly Group AB |
| EMCOR Group |
Oatly Group and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and EMCOR
The main advantage of trading using opposite Oatly Group and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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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