Correlation Between Oatly Group and Two Harbors
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Two Harbors 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 Two Harbors 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 Two Harbors Investments, you can compare the effects of market volatilities on Oatly Group and Two Harbors 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 Two Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Two Harbors.
Diversification Opportunities for Oatly Group and Two Harbors
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oatly and Two is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Two Harbors Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Harbors Investments 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 Two Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Harbors Investments has no effect on the direction of Oatly Group i.e., Oatly Group and Two Harbors go up and down completely randomly.
Pair Corralation between Oatly Group and Two Harbors
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Two Harbors. In addition to that, Oatly Group is 6.61 times more volatile than Two Harbors Investments. It trades about -0.33 of its total potential returns per unit of risk. Two Harbors Investments is currently generating about -0.07 per unit of volatility. If you would invest 2,490 in Two Harbors Investments on November 4, 2024 and sell it today you would lose (15.00) from holding Two Harbors Investments or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Two Harbors Investments
Performance |
| Timeline |
| Oatly Group AB |
| Two Harbors Investments |
Oatly Group and Two Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Two Harbors
The main advantage of trading using opposite Oatly Group and Two Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Two Harbors 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 Two Harbors will offset losses from the drop in Two Harbors' long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Two Harbors vs. Legacy Education | Two Harbors vs. Apple Inc | Two Harbors vs. Microsoft | Two Harbors vs. NVIDIA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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