Correlation Between Mativ Holdings and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Avient Corp 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 Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Avient Corp, you can compare the effects of market volatilities on Mativ Holdings and Avient Corp 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 Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Avient Corp.
Diversification Opportunities for Mativ Holdings and Avient Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mativ and Avient is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Avient Corp go up and down completely randomly.
Pair Corralation between Mativ Holdings and Avient Corp
Given the investment horizon of 90 days Mativ Holdings is expected to generate 5.72 times less return on investment than Avient Corp. In addition to that, Mativ Holdings is 2.23 times more volatile than Avient Corp. It trades about 0.0 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.05 per unit of volatility. If you would invest 3,833 in Avient Corp on August 31, 2024 and sell it today you would earn a total of 1,292 from holding Avient Corp or generate 33.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Avient Corp
Performance |
| Timeline |
| Mativ Holdings |
| Avient Corp |
Mativ Holdings and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Avient Corp
The main advantage of trading using opposite Mativ Holdings and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp'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 |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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