Correlation Between Mativ Holdings and Amgen
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Amgen Inc, you can compare the effects of market volatilities on Mativ Holdings and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Amgen.
Diversification Opportunities for Mativ Holdings and Amgen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mativ and Amgen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Amgen go up and down completely randomly.
Pair Corralation between Mativ Holdings and Amgen
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Amgen. In addition to that, Mativ Holdings is 2.2 times more volatile than Amgen Inc. It trades about -0.12 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.13 per unit of volatility. If you would invest 32,789 in Amgen Inc on September 2, 2024 and sell it today you would lose (4,502) from holding Amgen Inc or give up 13.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Amgen Inc
Performance |
| Timeline |
| Mativ Holdings |
| Amgen Inc |
Mativ Holdings and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Amgen
The main advantage of trading using opposite Mativ Holdings and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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