Correlation Between Oatly Group and Volaris
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Volaris 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 Volaris 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 Volaris, you can compare the effects of market volatilities on Oatly Group and Volaris 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 Volaris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Volaris.
Diversification Opportunities for Oatly Group and Volaris
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oatly and Volaris is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Volaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volaris 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 Volaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volaris has no effect on the direction of Oatly Group i.e., Oatly Group and Volaris go up and down completely randomly.
Pair Corralation between Oatly Group and Volaris
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Volaris. In addition to that, Oatly Group is 2.88 times more volatile than Volaris. It trades about -0.05 of its total potential returns per unit of risk. Volaris is currently generating about 0.08 per unit of volatility. If you would invest 741.00 in Volaris on August 31, 2024 and sell it today you would earn a total of 26.00 from holding Volaris or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oatly Group AB vs. Volaris
Performance |
| Timeline |
| Oatly Group AB |
| Volaris |
Oatly Group and Volaris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Volaris
The main advantage of trading using opposite Oatly Group and Volaris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Volaris 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 Volaris will offset losses from the drop in Volaris' long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Volaris vs. Allegiant Travel | Volaris vs. Azul SA | Volaris vs. Alaska Air Group | Volaris vs. International Consolidated Airlines |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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