Correlation Between Mativ Holdings and 191216DC1

Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and 191216DC1 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 191216DC1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mativ Holdings and COCA COLA CO, you can compare the effects of market volatilities on Mativ Holdings and 191216DC1 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 191216DC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and 191216DC1.

Diversification Opportunities for Mativ Holdings and 191216DC1

0.69

Correlation Coefficient

Mativ Holdings  191216DC1

Poor diversification

The 3 months correlation between Mativ and 191216DC1 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216DC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and 191216DC1 go up and down completely randomly.

Pair Corralation between Mativ Holdings and 191216DC1

If you would invest  0.00  in COCA COLA CO on September 26, 2024 and sell it today you would earn a total of  0.00  from holding COCA COLA CO or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.2%
Values	Daily Returns

Mativ Holdings  vs.  COCA COLA CO

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.

COCA A CO

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216DC1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mativ Holdings and 191216DC1

The main advantage of trading using opposite Mativ Holdings and 191216DC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, 191216DC1 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 191216DC1 will offset losses from the drop in 191216DC1's long position.

The idea behind Mativ Holdings and COCA COLA CO 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.