Correlation Between 98138HAJ0 and Mativ Holdings

Can any of the company-specific risk be diversified away by investing in both 98138HAJ0 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 98138HAJ0 and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WDAY 38 01 APR 32 and Mativ Holdings, you can compare the effects of market volatilities on 98138HAJ0 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 98138HAJ0 with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 98138HAJ0 and Mativ Holdings.

Diversification Opportunities for 98138HAJ0 and Mativ Holdings

0.67

Correlation Coefficient

98138HAJ0  Mativ Holdings

Poor diversification

The 3 months correlation between 98138HAJ0 and Mativ is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WDAY 38 01 APR 32 and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and 98138HAJ0 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 WDAY 38 01 APR 32 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 98138HAJ0 i.e., 98138HAJ0 and Mativ Holdings go up and down completely randomly.

Pair Corralation between 98138HAJ0 and Mativ Holdings

Assuming the 90 days trading horizon WDAY 38 01 APR 32 is expected to generate 0.19 times more return on investment than Mativ Holdings. However, WDAY 38 01 APR 32 is 5.37 times less risky than Mativ Holdings. It trades about -0.01 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.02 per unit of risk. If you would invest  9,094  in WDAY 38 01 APR 32 on September 28, 2024 and sell it today you would lose (366.00) from holding WDAY 38 01 APR 32 or give up 4.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.96%
Values	Daily Returns

WDAY 38 01 APR 32  vs.  Mativ Holdings

WDAY 38 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WDAY 38 01 APR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for WDAY 38 01 APR 32 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with 98138HAJ0 and Mativ Holdings

The main advantage of trading using opposite 98138HAJ0 and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 98138HAJ0 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 WDAY 38 01 APR 32 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.