Correlation Between Mativ Holdings and Cabot
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Cabot 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 Cabot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Cabot, you can compare the effects of market volatilities on Mativ Holdings and Cabot 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 Cabot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Cabot.
Diversification Opportunities for Mativ Holdings and Cabot
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mativ and Cabot is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Cabot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot 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 Cabot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Cabot go up and down completely randomly.
Pair Corralation between Mativ Holdings and Cabot
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Cabot. In addition to that, Mativ Holdings is 1.96 times more volatile than Cabot. It trades about 0.0 of its total potential returns per unit of risk. Cabot is currently generating about 0.06 per unit of volatility. If you would invest 6,851 in Cabot on September 2, 2024 and sell it today you would earn a total of 4,111 from holding Cabot or generate 60.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Cabot
Performance |
| Timeline |
| Mativ Holdings |
| Cabot |
Mativ Holdings and Cabot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Cabot
The main advantage of trading using opposite Mativ Holdings and Cabot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Cabot 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 Cabot will offset losses from the drop in Cabot'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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