Correlation Between NESNVX and Oatly Group

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

By analyzing existing cross correlation between NESNVX 3625 24 SEP 28 and Oatly Group AB, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Oatly Group.

Diversification Opportunities for NESNVX and Oatly Group

-0.13

Correlation Coefficient

NESNVX  Oatly Group

Good diversification

The 3 months correlation between NESNVX and Oatly is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 3625 24 SEP 28 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 NESNVX 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 NESNVX 3625 24 SEP 28 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 NESNVX i.e., NESNVX and Oatly Group go up and down completely randomly.

Pair Corralation between NESNVX and Oatly Group

Assuming the 90 days trading horizon NESNVX is expected to generate 3.17 times less return on investment than Oatly Group. But when comparing it to its historical volatility, NESNVX 3625 24 SEP 28 is 30.11 times less risky than Oatly Group. It trades about 0.06 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,230  in Oatly Group AB on December 23, 2024 and sell it today you would lose (228.00) from holding Oatly Group AB or give up 18.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.93%
Values	Daily Returns

NESNVX 3625 24 SEP 28  vs.  Oatly Group AB

NESNVX 3625 24

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NESNVX 3625 24 SEP 28 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The recent stock price disturbance, 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 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 NESNVX and Oatly Group

The main advantage of trading using opposite NESNVX and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 3625 24 SEP 28 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.