Correlation Between LATAM Airlines and Oatly Group
Can any of the company-specific risk be diversified away by investing in both LATAM Airlines 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 LATAM Airlines and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LATAM Airlines Group and Oatly Group AB, you can compare the effects of market volatilities on LATAM Airlines 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 LATAM Airlines with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Oatly Group.
Diversification Opportunities for LATAM Airlines and Oatly Group
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LATAM and Oatly is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines 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 LATAM Airlines 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 LATAM Airlines 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 LATAM Airlines i.e., LATAM Airlines and Oatly Group go up and down completely randomly.
Pair Corralation between LATAM Airlines and Oatly Group
Considering the 90-day investment horizon LATAM Airlines Group is expected to generate 0.16 times more return on investment than Oatly Group. However, LATAM Airlines Group is 6.34 times less risky than Oatly Group. It trades about 0.19 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.01 per unit of risk. If you would invest 2,750 in LATAM Airlines Group on December 18, 2024 and sell it today you would earn a total of 466.00 from holding LATAM Airlines Group or generate 16.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
LATAM Airlines Group vs. Oatly Group AB
Performance |
Timeline |
LATAM Airlines Group |
Oatly Group AB |
LATAM Airlines and Oatly Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LATAM Airlines and Oatly Group
The main advantage of trading using opposite LATAM Airlines and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines 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.LATAM Airlines vs. Vulcan Materials | LATAM Airlines vs. Lend Lease Group | LATAM Airlines vs. Chester Mining | LATAM Airlines vs. Mitsubishi UFJ Lease |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |