Correlation Between Oatly Group and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Vodka Brands 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 Vodka Brands 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 Vodka Brands Corp, you can compare the effects of market volatilities on Oatly Group and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Vodka Brands.
Diversification Opportunities for Oatly Group and Vodka Brands
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oatly and Vodka is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of Oatly Group i.e., Oatly Group and Vodka Brands go up and down completely randomly.
Pair Corralation between Oatly Group and Vodka Brands
Given the investment horizon of 90 days Oatly Group is expected to generate 1.33 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, Oatly Group AB is 1.25 times less risky than Vodka Brands. It trades about 0.2 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Vodka Brands Corp on October 20, 2024 and sell it today you would earn a total of 23.00 from holding Vodka Brands Corp or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oatly Group AB vs. Vodka Brands Corp
Performance |
| Timeline |
| Oatly Group AB |
| Vodka Brands Corp |
Oatly Group and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Vodka Brands
The main advantage of trading using opposite Oatly Group and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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