Correlation Between Software Acquisition and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Software Acquisition 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 Software Acquisition and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Software Acquisition Group and Oatly Group AB, you can compare the effects of market volatilities on Software Acquisition 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 Software Acquisition with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Acquisition and Oatly Group.
Diversification Opportunities for Software Acquisition and Oatly Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Software and Oatly is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group 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 Software Acquisition 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 Software Acquisition Group 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 Software Acquisition i.e., Software Acquisition and Oatly Group go up and down completely randomly.
Pair Corralation between Software Acquisition and Oatly Group
Given the investment horizon of 90 days Software Acquisition Group is expected to generate 0.67 times more return on investment than Oatly Group. However, Software Acquisition Group is 1.49 times less risky than Oatly Group. It trades about -0.01 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.02 per unit of risk. If you would invest 149.00 in Software Acquisition Group on January 10, 2025 and sell it today you would lose (56.00) from holding Software Acquisition Group or give up 37.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Software Acquisition Group vs. Oatly Group AB
Performance |
| Timeline |
| Software Acquisition |
| Oatly Group AB |
Software Acquisition and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Software Acquisition and Oatly Group
The main advantage of trading using opposite Software Acquisition and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition 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.| Software Acquisition vs. Middlesex Water | Software Acquisition vs. Canaf Investments | Software Acquisition vs. CenterPoint Energy | Software Acquisition vs. Black Hills |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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