Correlation Between Universal Music and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Universal Music 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 Universal Music and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Music Group and Oatly Group AB, you can compare the effects of market volatilities on Universal Music 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 Universal Music with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Music and Oatly Group.
Diversification Opportunities for Universal Music and Oatly Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Oatly is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Universal Music 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 Universal Music 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 Universal Music 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 Universal Music i.e., Universal Music and Oatly Group go up and down completely randomly.
Pair Corralation between Universal Music and Oatly Group
Assuming the 90 days horizon Universal Music Group is expected to generate 0.68 times more return on investment than Oatly Group. However, Universal Music Group is 1.47 times less risky than Oatly Group. It trades about -0.06 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.06 per unit of risk. If you would invest 3,108 in Universal Music Group on August 30, 2024 and sell it today you would lose (728.00) from holding Universal Music Group or give up 23.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Music Group vs. Oatly Group AB
Performance |
| Timeline |
| Universal Music Group |
| Oatly Group AB |
Universal Music and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Music and Oatly Group
The main advantage of trading using opposite Universal Music and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Music 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.| Universal Music vs. Thunderbird Entertainment Group | Universal Music vs. Warner Music Group | Universal Music vs. Live Nation Entertainment | Universal Music vs. Atlanta Braves Holdings, |
| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |