Correlation Between Oatly Group and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Coca Cola 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 Coca Cola 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 Coca Cola Femsa SAB, you can compare the effects of market volatilities on Oatly Group and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Coca Cola.
Diversification Opportunities for Oatly Group and Coca Cola
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oatly and Coca is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Coca Cola Femsa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Femsa 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola Femsa has no effect on the direction of Oatly Group i.e., Oatly Group and Coca Cola go up and down completely randomly.
Pair Corralation between Oatly Group and Coca Cola
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Coca Cola. In addition to that, Oatly Group is 4.92 times more volatile than Coca Cola Femsa SAB. It trades about -0.07 of its total potential returns per unit of risk. Coca Cola Femsa SAB is currently generating about -0.22 per unit of volatility. If you would invest 8,446 in Coca Cola Femsa SAB on August 30, 2024 and sell it today you would lose (513.00) from holding Coca Cola Femsa SAB or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Coca Cola Femsa SAB
Performance |
| Timeline |
| Oatly Group AB |
| Coca Cola Femsa |
Oatly Group and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Coca Cola
The main advantage of trading using opposite Oatly Group and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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