Correlation Between Mativ Holdings and Enerpac Tool

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

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

Diversification Opportunities for Mativ Holdings and Enerpac Tool

-0.83

Correlation Coefficient

Mativ Holdings  Enerpac Tool

Pay attention - limited upside

The 3 months correlation between Mativ and Enerpac is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Enerpac Tool Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerpac Tool Group 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 Enerpac Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerpac Tool Group has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Enerpac Tool go up and down completely randomly.

Pair Corralation between Mativ Holdings and Enerpac Tool

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Enerpac Tool. In addition to that, Mativ Holdings is 2.13 times more volatile than Enerpac Tool Group. It trades about -0.11 of its total potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.18 per unit of volatility. If you would invest  3,983  in Enerpac Tool Group on August 31, 2024 and sell it today you would earn a total of  843.00  from holding Enerpac Tool Group or generate 21.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Mativ Holdings  vs.  Enerpac Tool Group

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 December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Enerpac Tool Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Enerpac Tool exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mativ Holdings and Enerpac Tool

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

The idea behind Mativ Holdings and Enerpac Tool Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.