Correlation Between Oatly Group and Gentex
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on Oatly Group and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Gentex.
Diversification Opportunities for Oatly Group and Gentex
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oatly and Gentex is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Oatly Group i.e., Oatly Group and Gentex go up and down completely randomly.
Pair Corralation between Oatly Group and Gentex
Given the investment horizon of 90 days Oatly Group AB is expected to generate 4.69 times more return on investment than Gentex. However, Oatly Group is 4.69 times more volatile than Gentex. It trades about -0.06 of its potential returns per unit of risk. Gentex is currently generating about -0.76 per unit of risk. If you would invest 69.00 in Oatly Group AB on October 14, 2024 and sell it today you would lose (4.00) from holding Oatly Group AB or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Gentex
Performance |
| Timeline |
| Oatly Group AB |
| Gentex |
Oatly Group and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Gentex
The main advantage of trading using opposite Oatly Group and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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