Correlation Between Tyson Foods and Oatly Group

Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Oatly Group 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 Tyson Foods and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tyson Foods and Oatly Group AB, you can compare the effects of market volatilities on Tyson Foods and Oatly Group 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 Tyson Foods with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Oatly Group.

Diversification Opportunities for Tyson Foods and Oatly Group

-0.43

Correlation Coefficient

Tyson Foods  Oatly Group

Very good diversification

The 3 months correlation between Tyson and Oatly is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB and Tyson Foods 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 Tyson Foods are associated (or correlated) with Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Tyson Foods i.e., Tyson Foods and Oatly Group go up and down completely randomly.

Pair Corralation between Tyson Foods and Oatly Group

Considering the 90-day investment horizon Tyson Foods is expected to generate 0.14 times more return on investment than Oatly Group. However, Tyson Foods is 6.9 times less risky than Oatly Group. It trades about 0.03 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.02 per unit of risk. If you would invest  5,891  in Tyson Foods on December 17, 2024 and sell it today you would earn a total of  97.00  from holding Tyson Foods or generate 1.65% return on investment over 90 days.

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

Tyson Foods  vs.  Oatly Group AB

Tyson Foods

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tyson Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Tyson Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 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.

Pair Trading with Tyson Foods and Oatly Group

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

The idea behind Tyson Foods and Oatly Group AB 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.