Correlation Between Procter Gamble and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Oatly Group 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 Procter Gamble and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Oatly Group AB, you can compare the effects of market volatilities on Procter Gamble and Oatly Group 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 Procter Gamble with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Oatly Group.
Diversification Opportunities for Procter Gamble and Oatly Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Procter and Oatly is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB and Procter Gamble 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 Procter Gamble are associated (or correlated) with Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Procter Gamble i.e., Procter Gamble and Oatly Group go up and down completely randomly.
Pair Corralation between Procter Gamble and Oatly Group
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.21 times more return on investment than Oatly Group. However, Procter Gamble is 4.69 times less risky than Oatly Group. It trades about 0.07 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.0 per unit of risk. If you would invest 14,979 in Procter Gamble on August 26, 2024 and sell it today you would earn a total of 2,649 from holding Procter Gamble or generate 17.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Oatly Group AB
Performance |
| Timeline |
| Procter Gamble |
| Oatly Group AB |
Procter Gamble and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Oatly Group
The main advantage of trading using opposite Procter Gamble and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Oatly Group vs. Bellring Brands LLC | Oatly Group vs. Ingredion Incorporated | Oatly Group vs. Nomad Foods | Oatly Group vs. Post Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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