Correlation Between Oatly Group and Stepan
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Stepan 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 Stepan 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 Stepan Company, you can compare the effects of market volatilities on Oatly Group and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Stepan.
Diversification Opportunities for Oatly Group and Stepan
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oatly and Stepan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Oatly Group i.e., Oatly Group and Stepan go up and down completely randomly.
Pair Corralation between Oatly Group and Stepan
Given the investment horizon of 90 days Oatly Group AB is expected to generate 3.41 times more return on investment than Stepan. However, Oatly Group is 3.41 times more volatile than Stepan Company. It trades about -0.04 of its potential returns per unit of risk. Stepan Company is currently generating about -0.13 per unit of risk. If you would invest 76.00 in Oatly Group AB on September 12, 2024 and sell it today you would lose (4.24) from holding Oatly Group AB or give up 5.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Stepan Company
Performance |
| Timeline |
| Oatly Group AB |
| Stepan Company |
Oatly Group and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Stepan
The main advantage of trading using opposite Oatly Group and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Oatly Group vs. Flow Beverage Corp | Oatly Group vs. Fbec Worldwide | Oatly Group vs. Hill Street Beverage | Oatly Group vs. Eq Energy Drink |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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