Correlation Between Oatly Group and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Treasury Wine 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 Treasury Wine 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 Treasury Wine Estates, you can compare the effects of market volatilities on Oatly Group and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Treasury Wine.
Diversification Opportunities for Oatly Group and Treasury Wine
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oatly and Treasury is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Oatly Group i.e., Oatly Group and Treasury Wine go up and down completely randomly.
Pair Corralation between Oatly Group and Treasury Wine
Given the investment horizon of 90 days Oatly Group AB is expected to generate 2.62 times more return on investment than Treasury Wine. However, Oatly Group is 2.62 times more volatile than Treasury Wine Estates. It trades about -0.07 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.31 per unit of risk. If you would invest 82.00 in Oatly Group AB on August 30, 2024 and sell it today you would lose (10.00) from holding Oatly Group AB or give up 12.2% 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. Treasury Wine Estates
Performance |
| Timeline |
| Oatly Group AB |
| Treasury Wine Estates |
Oatly Group and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Treasury Wine
The main advantage of trading using opposite Oatly Group and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Treasury Wine vs. Aristocrat Group Corp | Treasury Wine vs. Naked Wines plc | Treasury Wine vs. Willamette Valley Vineyards | Treasury Wine vs. Andrew Peller Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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