Correlation Between Oatly Group and WarpSpeed Taxi

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

Diversification Opportunities for Oatly Group and WarpSpeed Taxi

0.4

Correlation Coefficient

Oatly Group  WarpSpeed Taxi

Very weak diversification

The 3 months correlation between Oatly and WarpSpeed is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oatly Group AB and WarpSpeed Taxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WarpSpeed Taxi 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 WarpSpeed Taxi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WarpSpeed Taxi has no effect on the direction of Oatly Group i.e., Oatly Group and WarpSpeed Taxi go up and down completely randomly.

Pair Corralation between Oatly Group and WarpSpeed Taxi

Given the investment horizon of 90 days Oatly Group AB is expected to generate 2.58 times more return on investment than WarpSpeed Taxi. However, Oatly Group is 2.58 times more volatile than WarpSpeed Taxi. It trades about -0.02 of its potential returns per unit of risk. WarpSpeed Taxi is currently generating about -0.21 per unit of risk. If you would invest  1,166  in Oatly Group AB on December 4, 2024 and sell it today you would lose (285.00) from holding Oatly Group AB or give up 24.44% of portfolio value over 90 days.

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

Oatly Group AB  vs.  WarpSpeed Taxi

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

WarpSpeed Taxi

Risk-Adjusted Performance

Very Weak

Over the last 90 days WarpSpeed Taxi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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 WarpSpeed Taxi

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

The idea behind Oatly Group AB and WarpSpeed Taxi 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 Stocks Directory module to find actively traded stocks across global markets.