Correlation Between Amgen and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Mativ Holdings, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Mativ Holdings.
Diversification Opportunities for Amgen and Mativ Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amgen and Mativ is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Mativ Holdings go up and down completely randomly.
Pair Corralation between Amgen and Mativ Holdings
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Mativ Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Amgen Inc is 2.47 times less risky than Mativ Holdings. The stock trades about -0.21 of its potential returns per unit of risk. The Mativ Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,555 in Mativ Holdings on August 31, 2024 and sell it today you would lose (202.00) from holding Mativ Holdings or give up 12.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Mativ Holdings
Performance |
| Timeline |
| Amgen Inc |
| Mativ Holdings |
Amgen and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Mativ Holdings
The main advantage of trading using opposite Amgen and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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.| Amgen vs. Pfizer Inc | Amgen vs. RLJ Lodging Trust | Amgen vs. Aquagold International | Amgen vs. Stepstone Group |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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