Correlation Between Oatly Group and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Procter Gamble 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 Procter Gamble 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 Procter Gamble, you can compare the effects of market volatilities on Oatly Group and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Procter Gamble.
Diversification Opportunities for Oatly Group and Procter Gamble
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oatly and Procter is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Oatly Group i.e., Oatly Group and Procter Gamble go up and down completely randomly.
Pair Corralation between Oatly Group and Procter Gamble
Given the investment horizon of 90 days Oatly Group is expected to generate 4.81 times less return on investment than Procter Gamble. In addition to that, Oatly Group is 4.69 times more volatile than Procter Gamble. It trades about 0.0 of its total potential returns per unit of risk. Procter Gamble is currently generating about 0.07 per unit of volatility. If you would invest 14,979 in Procter Gamble on August 26, 2024 and sell it today you would earn a total of 2,649 from holding Procter Gamble or generate 17.68% 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. Procter Gamble
Performance |
| Timeline |
| Oatly Group AB |
| Procter Gamble |
Oatly Group and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Procter Gamble
The main advantage of trading using opposite Oatly Group and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Oatly Group vs. Bellring Brands LLC | Oatly Group vs. Ingredion Incorporated | Oatly Group vs. Nomad Foods | Oatly Group vs. Post Holdings |
| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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