Correlation Between Oatly Group and Constellation Brands
Can any of the company-specific risk be diversified away by investing in both Oatly Group and Constellation Brands 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 Constellation Brands 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 Constellation Brands Class, you can compare the effects of market volatilities on Oatly Group and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Constellation Brands.
Diversification Opportunities for Oatly Group and Constellation Brands
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oatly and Constellation is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of Oatly Group i.e., Oatly Group and Constellation Brands go up and down completely randomly.
Pair Corralation between Oatly Group and Constellation Brands
Given the investment horizon of 90 days Oatly Group AB is expected to generate 4.02 times more return on investment than Constellation Brands. However, Oatly Group is 4.02 times more volatile than Constellation Brands Class. It trades about 0.05 of its potential returns per unit of risk. Constellation Brands Class is currently generating about 0.02 per unit of risk. If you would invest 101.00 in Oatly Group AB on March 4, 2024 and sell it today you would earn a total of 8.00 from holding Oatly Group AB or generate 7.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Oatly Group AB vs. Constellation Brands Class
Performance |
Timeline |
Oatly Group AB |
Constellation Brands |
Oatly Group and Constellation Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oatly Group and Constellation Brands
The main advantage of trading using opposite Oatly Group and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.Oatly Group vs. Hill Street Beverage | Oatly Group vs. Primo Water Corp | Oatly Group vs. Vita Coco | Oatly Group vs. Coca Cola Femsa SAB |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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