Correlation Between Oatly Group and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Titan Machinery 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 Titan Machinery 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 Titan Machinery, you can compare the effects of market volatilities on Oatly Group and Titan Machinery 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 Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Titan Machinery.
Diversification Opportunities for Oatly Group and Titan Machinery
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oatly and Titan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Oatly Group i.e., Oatly Group and Titan Machinery go up and down completely randomly.
Pair Corralation between Oatly Group and Titan Machinery
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Titan Machinery. In addition to that, Oatly Group is 1.23 times more volatile than Titan Machinery. It trades about -0.09 of its total potential returns per unit of risk. Titan Machinery is currently generating about -0.07 per unit of volatility. If you would invest 2,332 in Titan Machinery on September 3, 2024 and sell it today you would lose (787.00) from holding Titan Machinery or give up 33.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Titan Machinery
Performance |
| Timeline |
| Oatly Group AB |
| Titan Machinery |
Oatly Group and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Titan Machinery
The main advantage of trading using opposite Oatly Group and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
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 CEOs Directory module to screen CEOs from public companies around the world.
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