Correlation Between Mativ Holdings and BCB Bancorp

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

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

Diversification Opportunities for Mativ Holdings and BCB Bancorp

-0.18

Correlation Coefficient

Mativ Holdings  BCB Bancorp

Good diversification

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

Pair Corralation between Mativ Holdings and BCB Bancorp

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the BCB Bancorp. In addition to that, Mativ Holdings is 1.73 times more volatile than BCB Bancorp. It trades about -0.05 of its total potential returns per unit of risk. BCB Bancorp is currently generating about 0.06 per unit of volatility. 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

Mativ Holdings  vs.  BCB Bancorp

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.

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.

Pair Trading with Mativ Holdings and BCB Bancorp

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

The idea behind Mativ Holdings and BCB Bancorp 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 Global Correlations module to find global opportunities by holding instruments from different markets.