Correlation Between Orior AG and Nestl SA

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

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

Diversification Opportunities for Orior AG and Nestl SA

0.72

Correlation Coefficient

Orior AG  Nestl SA

Poor diversification

The 3 months correlation between Orior and Nestl is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orior AG and Nestl SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestl SA and Orior AG 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 Orior AG are associated (or correlated) with Nestl SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestl SA has no effect on the direction of Orior AG i.e., Orior AG and Nestl SA go up and down completely randomly.

Pair Corralation between Orior AG and Nestl SA

Assuming the 90 days trading horizon Orior AG is expected to under-perform the Nestl SA. In addition to that, Orior AG is 4.74 times more volatile than Nestl SA. It trades about -0.08 of its total potential returns per unit of risk. Nestl SA is currently generating about -0.2 per unit of volatility. If you would invest  8,666  in Nestl SA on April 22, 2025 and sell it today you would lose (894.00) from holding Nestl SA or give up 10.32% of portfolio value over 90 days.

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

Orior AG  vs.  Nestl SA

Orior AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orior AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Nestl SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nestl SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Orior AG and Nestl SA

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

The idea behind Orior AG and Nestl SA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.