Correlation Between Oatly Group and SNDL
Can any of the company-specific risk be diversified away by investing in both Oatly Group and SNDL 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 SNDL 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 SNDL Inc, you can compare the effects of market volatilities on Oatly Group and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and SNDL.
Diversification Opportunities for Oatly Group and SNDL
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oatly and SNDL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Oatly Group i.e., Oatly Group and SNDL go up and down completely randomly.
Pair Corralation between Oatly Group and SNDL
Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.46 times more return on investment than SNDL. However, Oatly Group is 1.46 times more volatile than SNDL Inc. It trades about -0.04 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.08 per unit of risk. If you would invest 81.00 in Oatly Group AB on August 28, 2024 and sell it today you would lose (7.00) from holding Oatly Group AB or give up 8.64% 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. SNDL Inc
Performance |
| Timeline |
| Oatly Group AB |
| SNDL Inc |
Oatly Group and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and SNDL
The main advantage of trading using opposite Oatly Group and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Oatly Group vs. Bellring Brands LLC | Oatly Group vs. Ingredion Incorporated | Oatly Group vs. Nomad Foods | Oatly Group vs. Simply Good Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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