Correlation Between Mativ Holdings and Crown Electrokinetics
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Crown Electrokinetics 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 Crown Electrokinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Crown Electrokinetics Corp, you can compare the effects of market volatilities on Mativ Holdings and Crown Electrokinetics 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 Crown Electrokinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Crown Electrokinetics.
Diversification Opportunities for Mativ Holdings and Crown Electrokinetics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mativ and Crown is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Crown Electrokinetics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Electrokinetics 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 Crown Electrokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Electrokinetics has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Crown Electrokinetics go up and down completely randomly.
Pair Corralation between Mativ Holdings and Crown Electrokinetics
Given the investment horizon of 90 days Mativ Holdings is expected to generate 0.18 times more return on investment than Crown Electrokinetics. However, Mativ Holdings is 5.57 times less risky than Crown Electrokinetics. It trades about 0.01 of its potential returns per unit of risk. Crown Electrokinetics Corp is currently generating about -0.05 per unit of risk. If you would invest 1,582 in Mativ Holdings on August 30, 2024 and sell it today you would lose (229.00) from holding Mativ Holdings or give up 14.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Mativ Holdings vs. Crown Electrokinetics Corp
Performance |
| Timeline |
| Mativ Holdings |
| Crown Electrokinetics |
Mativ Holdings and Crown Electrokinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Crown Electrokinetics
The main advantage of trading using opposite Mativ Holdings and Crown Electrokinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Crown Electrokinetics 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 Crown Electrokinetics will offset losses from the drop in Crown Electrokinetics' 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 |
| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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