Correlation Between Mativ Holdings and Baozun
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Baozun 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 Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Baozun Inc, you can compare the effects of market volatilities on Mativ Holdings and Baozun 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 Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Baozun.
Diversification Opportunities for Mativ Holdings and Baozun
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mativ and Baozun is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun 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 Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Baozun go up and down completely randomly.
Pair Corralation between Mativ Holdings and Baozun
Given the investment horizon of 90 days Mativ Holdings is expected to generate 1.06 times more return on investment than Baozun. However, Mativ Holdings is 1.06 times more volatile than Baozun Inc. It trades about 0.03 of its potential returns per unit of risk. Baozun Inc is currently generating about 0.02 per unit of risk. If you would invest 1,166 in Mativ Holdings on September 4, 2024 and sell it today you would earn a total of 169.00 from holding Mativ Holdings or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Baozun Inc
Performance |
| Timeline |
| Mativ Holdings |
| Baozun Inc |
Mativ Holdings and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Baozun
The main advantage of trading using opposite Mativ Holdings and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun'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 |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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