Correlation Between Oatly Group and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Westrock Coffee 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 Westrock Coffee 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 Westrock Coffee, you can compare the effects of market volatilities on Oatly Group and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Westrock Coffee.
Diversification Opportunities for Oatly Group and Westrock Coffee
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oatly and Westrock is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Oatly Group i.e., Oatly Group and Westrock Coffee go up and down completely randomly.
Pair Corralation between Oatly Group and Westrock Coffee
Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the Westrock Coffee. In addition to that, Oatly Group is 1.25 times more volatile than Westrock Coffee. It trades about -0.04 of its total potential returns per unit of risk. Westrock Coffee is currently generating about 0.01 per unit of volatility. If you would invest 728.00 in Westrock Coffee on September 12, 2024 and sell it today you would lose (20.00) from holding Westrock Coffee or give up 2.75% 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. Westrock Coffee
Performance |
| Timeline |
| Oatly Group AB |
| Westrock Coffee |
Oatly Group and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oatly Group and Westrock Coffee
The main advantage of trading using opposite Oatly Group and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee's long position.| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
| Westrock Coffee vs. General Mills | Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |