Correlation Between Nomad Foods and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Nomad 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 Nomad 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 Nomad Foods and Oatly Group AB, you can compare the effects of market volatilities on Nomad 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 Nomad Foods with a short position of Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and Oatly Group.
Diversification Opportunities for Nomad Foods and Oatly Group
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomad and Oatly is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nomad 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 Nomad 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 Nomad 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 Nomad Foods i.e., Nomad Foods and Oatly Group go up and down completely randomly.
Pair Corralation between Nomad Foods and Oatly Group
Given the investment horizon of 90 days Nomad Foods is expected to generate 82.84 times less return on investment than Oatly Group. But when comparing it to its historical volatility, Nomad Foods is 28.43 times less risky than Oatly Group. It trades about 0.01 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Oatly Group AB on November 19, 2024 and sell it today you would earn a total of 770.00 from holding Oatly Group AB or generate 350.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. Oatly Group AB
Performance |
| Timeline |
| Nomad Foods |
| Oatly Group AB |
Nomad Foods and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and Oatly Group
The main advantage of trading using opposite Nomad Foods and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad 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.| Nomad Foods vs. Lancaster Colony | Nomad Foods vs. Treehouse Foods | Nomad Foods vs. John B Sanfilippo | Nomad Foods vs. Seneca Foods Corp |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |