Correlation Between Naked Wines and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Naked Wines 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 Naked Wines and Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Oatly Group AB, you can compare the effects of market volatilities on Naked Wines 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 Naked Wines with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Oatly Group.
Diversification Opportunities for Naked Wines and Oatly Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Naked and Oatly is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc 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 Naked Wines 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 Naked Wines plc 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 Naked Wines i.e., Naked Wines and Oatly Group go up and down completely randomly.
Pair Corralation between Naked Wines and Oatly Group
Assuming the 90 days horizon Naked Wines plc is expected to under-perform the Oatly Group. In addition to that, Naked Wines is 1.58 times more volatile than Oatly Group AB. It trades about -0.22 of its total potential returns per unit of risk. Oatly Group AB is currently generating about -0.11 per unit of volatility. If you would invest 72.00 in Oatly Group AB on November 2, 2024 and sell it today you would lose (5.00) from holding Oatly Group AB or give up 6.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Naked Wines plc vs. Oatly Group AB
Performance |
| Timeline |
| Naked Wines plc |
| Oatly Group AB |
Naked Wines and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Oatly Group
The main advantage of trading using opposite Naked Wines and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines 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.| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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