Correlation Between Vodka Brands and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Vodka Brands 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 Vodka Brands and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodka Brands Corp and Oatly Group AB, you can compare the effects of market volatilities on Vodka Brands 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 Vodka Brands with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Oatly Group.
Diversification Opportunities for Vodka Brands and Oatly Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vodka and Oatly is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp 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 Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Oatly Group go up and down completely randomly.
Pair Corralation between Vodka Brands and Oatly Group
Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 1.66 times more return on investment than Oatly Group. However, Vodka Brands is 1.66 times more volatile than Oatly Group AB. It trades about 0.14 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.11 per unit of risk. If you would invest 107.00 in Vodka Brands Corp on November 2, 2024 and sell it today you would earn a total of 14.00 from holding Vodka Brands Corp or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Vodka Brands Corp vs. Oatly Group AB
Performance |
| Timeline |
| Vodka Brands Corp |
| Oatly Group AB |
Vodka Brands and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodka Brands and Oatly Group
The main advantage of trading using opposite Vodka Brands and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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.| Vodka Brands vs. Brown Forman | Vodka Brands vs. Brown Forman | Vodka Brands vs. Eastside Distilling | Vodka Brands vs. Diageo PLC ADR |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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