Correlation Between BCB Bancorp and Mativ Holdings

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

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

Diversification Opportunities for BCB Bancorp and Mativ Holdings

-0.18

Correlation Coefficient

BCB Bancorp  Mativ Holdings

Good diversification

The 3 months correlation between BCB and Mativ is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and BCB Bancorp 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 BCB Bancorp are associated (or correlated) with Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of BCB Bancorp i.e., BCB Bancorp and Mativ Holdings go up and down completely randomly.

Pair Corralation between BCB Bancorp and Mativ Holdings

Given the investment horizon of 90 days BCB Bancorp is expected to generate 0.58 times more return on investment than Mativ Holdings. However, BCB Bancorp is 1.73 times less risky than Mativ Holdings. It trades about 0.06 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.05 per unit of risk. If you would invest  996.00  in BCB Bancorp on October 7, 2024 and sell it today you would earn a total of  166.00  from holding BCB Bancorp or generate 16.67% return on investment over 90 days.

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

BCB Bancorp  vs.  Mativ Holdings

BCB Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BCB Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Mativ Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BCB Bancorp and Mativ Holdings

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

The idea behind BCB Bancorp and Mativ Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.