Correlation Between Oatly Group and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical, you can compare the effects of market volatilities on Oatly Group and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Eastman Chemical.
Diversification Opportunities for Oatly Group and Eastman Chemical
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oatly and Eastman is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Oatly Group i.e., Oatly Group and Eastman Chemical go up and down completely randomly.
Pair Corralation between Oatly Group and Eastman Chemical
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Eastman Chemical. In addition to that, Oatly Group is 3.15 times more volatile than Eastman Chemical. It trades about -0.02 of its total potential returns per unit of risk. Eastman Chemical is currently generating about 0.08 per unit of volatility. If you would invest 8,224 in Eastman Chemical on September 2, 2024 and sell it today you would earn a total of 2,248 from holding Eastman Chemical or generate 27.33% 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. Eastman Chemical
Performance |
| Timeline |
| Oatly Group AB |
| Eastman Chemical |
Oatly Group and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Eastman Chemical
The main advantage of trading using opposite Oatly Group and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Oatly Group vs. Campbell Soup | Oatly Group vs. ConAgra Foods | Oatly Group vs. Hormel Foods | Oatly Group vs. Kellanova |
| Eastman Chemical vs. Air Products and | Eastman Chemical vs. International Flavors Fragrances | Eastman Chemical vs. Sherwin Williams Co | Eastman Chemical vs. PPG 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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