Correlation Between Oatly Group and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Sensient Technologies 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 Sensient Technologies 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 Sensient Technologies, you can compare the effects of market volatilities on Oatly Group and Sensient Technologies 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 Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Sensient Technologies.
Diversification Opportunities for Oatly Group and Sensient Technologies
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oatly and Sensient is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies 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 Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of Oatly Group i.e., Oatly Group and Sensient Technologies go up and down completely randomly.
Pair Corralation between Oatly Group and Sensient Technologies
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Sensient Technologies. In addition to that, Oatly Group is 3.16 times more volatile than Sensient Technologies. It trades about -0.02 of its total potential returns per unit of risk. Sensient Technologies is currently generating about 0.02 per unit of volatility. If you would invest 7,064 in Sensient Technologies on August 31, 2024 and sell it today you would earn a total of 645.00 from holding Sensient Technologies or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Oatly Group AB vs. Sensient Technologies
Performance |
| Timeline |
| Oatly Group AB |
| Sensient Technologies |
Oatly Group and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Sensient Technologies
The main advantage of trading using opposite Oatly Group and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Sensient Technologies 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |