Correlation Between Oatly Group and ON24

Can any of the company-specific risk be diversified away by investing in both Oatly Group and ON24 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 ON24 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 ON24 Inc, you can compare the effects of market volatilities on Oatly Group and ON24 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 ON24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oatly Group and ON24.

Diversification Opportunities for Oatly Group and ON24

-0.34

Correlation Coefficient

Oatly Group  ON24

Very good diversification

The 3 months correlation between Oatly and ON24 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and ON24 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON24 Inc 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 ON24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON24 Inc has no effect on the direction of Oatly Group i.e., Oatly Group and ON24 go up and down completely randomly.

Pair Corralation between Oatly Group and ON24

Given the investment horizon of 90 days Oatly Group AB is expected to under-perform the ON24. In addition to that, Oatly Group is 1.92 times more volatile than ON24 Inc. It trades about -0.06 of its total potential returns per unit of risk. ON24 Inc is currently generating about 0.01 per unit of volatility. If you would invest  653.00  in ON24 Inc on October 25, 2024 and sell it today you would lose (2.00) from holding ON24 Inc or give up 0.31% of portfolio value over 90 days.

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

Oatly Group AB  vs.  ON24 Inc

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 latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ON24 Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ON24 Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ON24 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Oatly Group and ON24

The main advantage of trading using opposite Oatly Group and ON24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oatly Group position performs unexpectedly, ON24 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 ON24 will offset losses from the drop in ON24's long position.

The idea behind Oatly Group AB and ON24 Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.