Correlation Between Oatly Group and Pembina Pipeline

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

Diversification Opportunities for Oatly Group and Pembina Pipeline

0.73

Correlation Coefficient

Oatly Group  Pembina Pipeline

Poor diversification

The 3 months correlation between Oatly and Pembina is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and Pembina Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline has no effect on the direction of Oatly Group i.e., Oatly Group and Pembina Pipeline go up and down completely randomly.

Pair Corralation between Oatly Group and Pembina Pipeline

If you would invest  62.00  in Oatly Group AB on October 26, 2024 and sell it today you would earn a total of  7.01  from holding Oatly Group AB or generate 11.31% return on investment over 90 days.

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

Oatly Group AB  vs.  Pembina Pipeline

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.

Pembina Pipeline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pembina Pipeline 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 Pembina Pipeline

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

The idea behind Oatly Group AB and Pembina Pipeline 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.