Correlation Between Kellanova and Oatly Group

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

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

Diversification Opportunities for Kellanova and Oatly Group

-0.77

Correlation Coefficient

Kellanova  Oatly Group

Pay attention - limited upside

The 3 months correlation between Kellanova and Oatly is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova 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 Kellanova 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 Kellanova 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 Kellanova i.e., Kellanova and Oatly Group go up and down completely randomly.

Pair Corralation between Kellanova and Oatly Group

Taking into account the 90-day investment horizon Kellanova is expected to generate 0.02 times more return on investment than Oatly Group. However, Kellanova is 54.36 times less risky than Oatly Group. It trades about 0.27 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.0 per unit of risk. If you would invest  8,026  in Kellanova on December 28, 2024 and sell it today you would earn a total of  219.00  from holding Kellanova or generate 2.73% return on investment over 90 days.

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

Kellanova  vs.  Oatly Group AB

Kellanova

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kellanova is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional 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 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.

Pair Trading with Kellanova and Oatly Group

The main advantage of trading using opposite Kellanova and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova 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 Kellanova 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.