Correlation Between Oatly Group and Balance Labs

Can any of the company-specific risk be diversified away by investing in both Oatly Group and Balance Labs 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 Balance Labs 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 Balance Labs, you can compare the effects of market volatilities on Oatly Group and Balance Labs 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 Balance Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and Balance Labs.

Diversification Opportunities for Oatly Group and Balance Labs

0.0

Correlation Coefficient

Oatly Group  Balance Labs

Pay attention - limited upside

The 3 months correlation between Oatly and Balance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Balance Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balance Labs 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 Balance Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balance Labs has no effect on the direction of Oatly Group i.e., Oatly Group and Balance Labs go up and down completely randomly.

Pair Corralation between Oatly Group and Balance Labs

If you would invest  61.00  in Oatly Group AB on September 16, 2024 and sell it today you would earn a total of  8.00  from holding Oatly Group AB or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Oatly Group AB  vs.  Balance Labs

Oatly Group AB

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Balance Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balance Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Balance Labs is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oatly Group and Balance Labs

The main advantage of trading using opposite Oatly Group and Balance Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, Balance Labs 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 Balance Labs will offset losses from the drop in Balance Labs' long position.

The idea behind Oatly Group AB and Balance Labs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.