Correlation Between Iofina Plc and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Iofina Plc 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 Iofina Plc and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iofina plc and Mativ Holdings, you can compare the effects of market volatilities on Iofina Plc 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 Iofina Plc with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iofina Plc and Mativ Holdings.
Diversification Opportunities for Iofina Plc and Mativ Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iofina and Mativ is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Iofina plc and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Iofina Plc 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 Iofina plc 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 Iofina Plc i.e., Iofina Plc and Mativ Holdings go up and down completely randomly.
Pair Corralation between Iofina Plc and Mativ Holdings
Assuming the 90 days horizon Iofina plc is expected to under-perform the Mativ Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Iofina plc is 1.36 times less risky than Mativ Holdings. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Mativ Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Mativ Holdings on August 26, 2024 and sell it today you would earn a total of 40.00 from holding Mativ Holdings or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iofina plc vs. Mativ Holdings
Performance |
| Timeline |
| Iofina plc |
| Mativ Holdings |
Iofina Plc and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iofina Plc and Mativ Holdings
The main advantage of trading using opposite Iofina Plc and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iofina Plc 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.| Iofina Plc vs. Green Star Products | Iofina Plc vs. Greystone Logistics | Iofina Plc vs. Crown Electrokinetics Corp | Iofina Plc vs. Orica Ltd ADR |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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