Correlation Between Mativ Holdings and Green Star
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Green Star 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 Green Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Green Star Products, you can compare the effects of market volatilities on Mativ Holdings and Green Star 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 Green Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Green Star.
Diversification Opportunities for Mativ Holdings and Green Star
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mativ and Green is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Green Star Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Star Products 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 Green Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Star Products has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Green Star go up and down completely randomly.
Pair Corralation between Mativ Holdings and Green Star
Given the investment horizon of 90 days Mativ Holdings is expected to generate 59.66 times less return on investment than Green Star. But when comparing it to its historical volatility, Mativ Holdings is 7.32 times less risky than Green Star. It trades about 0.01 of its potential returns per unit of risk. Green Star Products is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Green Star Products on August 30, 2024 and sell it today you would earn a total of 0.01 from holding Green Star Products or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Green Star Products
Performance |
| Timeline |
| Mativ Holdings |
| Green Star Products |
Mativ Holdings and Green Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Green Star
The main advantage of trading using opposite Mativ Holdings and Green Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Green Star 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 Green Star will offset losses from the drop in Green Star'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 |
| Green Star vs. Akzo Nobel NV | Green Star vs. Avoca LLC | Green Star vs. Arkema SA ADR | Green Star vs. HUMANA INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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