Correlation Between Oatly Group and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Valneva SE 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 Valneva SE 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 Valneva SE ADR, you can compare the effects of market volatilities on Oatly Group and Valneva SE 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 Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Valneva SE.
Diversification Opportunities for Oatly Group and Valneva SE
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oatly and Valneva is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of Oatly Group i.e., Oatly Group and Valneva SE go up and down completely randomly.
Pair Corralation between Oatly Group and Valneva SE
Given the investment horizon of 90 days Oatly Group AB is expected to generate 1.15 times more return on investment than Valneva SE. However, Oatly Group is 1.15 times more volatile than Valneva SE ADR. It trades about -0.05 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.1 per unit of risk. If you would invest 97.00 in Oatly Group AB on October 22, 2024 and sell it today you would lose (27.80) from holding Oatly Group AB or give up 28.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Valneva SE ADR
Performance |
| Timeline |
| Oatly Group AB |
| Valneva SE ADR |
Oatly Group and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Valneva SE
The main advantage of trading using opposite Oatly Group and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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