Correlation Between AKITA Drilling and Oatly Group

Can any of the company-specific risk be diversified away by investing in both AKITA Drilling 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 AKITA Drilling and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AKITA Drilling and Oatly Group AB, you can compare the effects of market volatilities on AKITA Drilling 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 AKITA Drilling with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Oatly Group.

Diversification Opportunities for AKITA Drilling and Oatly Group

0.23

Correlation Coefficient

AKITA Drilling  Oatly Group

Modest diversification

The 3 months correlation between AKITA and Oatly is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and Oatly Group go up and down completely randomly.

Pair Corralation between AKITA Drilling and Oatly Group

Assuming the 90 days horizon AKITA Drilling is expected to generate 0.29 times more return on investment than Oatly Group. However, AKITA Drilling is 3.46 times less risky than Oatly Group. It trades about 0.05 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  113.00  in AKITA Drilling on December 19, 2024 and sell it today you would earn a total of  6.00  from holding AKITA Drilling or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

AKITA Drilling  vs.  Oatly Group AB

AKITA Drilling

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AKITA Drilling may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oatly Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oatly Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Oatly Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AKITA Drilling and Oatly Group

The main advantage of trading using opposite AKITA Drilling and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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.

The idea behind AKITA Drilling and Oatly Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.