Correlation Between Oatly Group and 502413BE6

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Can any of the company-specific risk be diversified away by investing in both Oatly Group and 502413BE6 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 502413BE6 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 L3 TECHNOLOGIES INC, you can compare the effects of market volatilities on Oatly Group and 502413BE6 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 502413BE6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and 502413BE6.

Diversification Opportunities for Oatly Group and 502413BE6

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Oatly and 502413BE6 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and L3 TECHNOLOGIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3 TECHNOLOGIES INC 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 502413BE6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3 TECHNOLOGIES INC has no effect on the direction of Oatly Group i.e., Oatly Group and 502413BE6 go up and down completely randomly.

Pair Corralation between Oatly Group and 502413BE6

Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the 502413BE6. In addition to that, Oatly Group is 4.67 times more volatile than L3 TECHNOLOGIES INC. It trades about -0.05 of its total potential returns per unit of risk. L3 TECHNOLOGIES INC is currently generating about -0.08 per unit of volatility. If you would invest  9,662  in L3 TECHNOLOGIES INC on August 31, 2024 and sell it today you would lose (42.00) from holding L3 TECHNOLOGIES INC or give up 0.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy18.18%
ValuesDaily Returns

Oatly Group AB  vs.  L3 TECHNOLOGIES INC

 Performance 
       Timeline  
Oatly Group AB 

Risk-Adjusted Performance

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Over the last 90 days Oatly Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
L3 TECHNOLOGIES INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days L3 TECHNOLOGIES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 502413BE6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Oatly Group and 502413BE6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oatly Group and 502413BE6

The main advantage of trading using opposite Oatly Group and 502413BE6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, 502413BE6 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 502413BE6 will offset losses from the drop in 502413BE6's long position.
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The idea behind Oatly Group AB and L3 TECHNOLOGIES INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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