Correlation Between Mativ Holdings and AMCON Distributing

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

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

Diversification Opportunities for Mativ Holdings and AMCON Distributing

0.4

Correlation Coefficient

Mativ Holdings  AMCON Distributing

Very weak diversification

The 3 months correlation between Mativ and AMCON is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and AMCON Distributing go up and down completely randomly.

Pair Corralation between Mativ Holdings and AMCON Distributing

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the AMCON Distributing. In addition to that, Mativ Holdings is 1.2 times more volatile than AMCON Distributing. It trades about -0.01 of its total potential returns per unit of risk. AMCON Distributing is currently generating about 0.0 per unit of volatility. If you would invest  18,146  in AMCON Distributing on September 12, 2024 and sell it today you would lose (4,246) from holding AMCON Distributing or give up 23.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.99%
Values	Daily Returns

Mativ Holdings  vs.  AMCON Distributing

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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AMCON Distributing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AMCON Distributing is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mativ Holdings and AMCON Distributing

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

The idea behind Mativ Holdings and AMCON Distributing 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.