Correlation Between Oatly Group and Timken
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Timken 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 Timken 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 Timken Company, you can compare the effects of market volatilities on Oatly Group and Timken 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 Timken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Timken.
Diversification Opportunities for Oatly Group and Timken
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oatly and Timken is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Timken Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timken 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 Timken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timken Company has no effect on the direction of Oatly Group i.e., Oatly Group and Timken go up and down completely randomly.
Pair Corralation between Oatly Group and Timken
Given the investment horizon of 90 days Oatly Group is expected to generate 2.99 times less return on investment than Timken. In addition to that, Oatly Group is 2.44 times more volatile than Timken Company. It trades about 0.0 of its total potential returns per unit of risk. Timken Company is currently generating about 0.02 per unit of volatility. If you would invest 7,122 in Timken Company on August 26, 2024 and sell it today you would earn a total of 474.00 from holding Timken Company or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Timken Company
Performance |
| Timeline |
| Oatly Group AB |
| Timken Company |
Oatly Group and Timken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Timken
The main advantage of trading using opposite Oatly Group and Timken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Timken 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 Timken will offset losses from the drop in Timken's long position.| Oatly Group vs. Bellring Brands LLC | Oatly Group vs. Ingredion Incorporated | Oatly Group vs. Nomad Foods | Oatly Group vs. Post Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |