Correlation Between Oatly Group and John B

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

Diversification Opportunities for Oatly Group and John B

0.85

Correlation Coefficient

Oatly Group  John B

Very poor diversification

The 3 months correlation between Oatly and John is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo 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 John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Oatly Group i.e., Oatly Group and John B go up and down completely randomly.

Pair Corralation between Oatly Group and John B

Given the investment horizon of 90 days Oatly Group AB is expected to generate 4.19 times more return on investment than John B. However, Oatly Group is 4.19 times more volatile than John B Sanfilippo. It trades about 0.0 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.15 per unit of risk. If you would invest  1,268  in Oatly Group AB on December 28, 2024 and sell it today you would lose (281.00) from holding Oatly Group AB or give up 22.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Oatly Group AB  vs.  John B Sanfilippo

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.

John B Sanfilippo

Risk-Adjusted Performance

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Oatly Group and John B

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

The idea behind Oatly Group AB and John B Sanfilippo 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.