Correlation Between Mativ Holdings and Johnson Matthey
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Johnson Matthey 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 Johnson Matthey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Johnson Matthey Plc, you can compare the effects of market volatilities on Mativ Holdings and Johnson Matthey 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 Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Johnson Matthey.
Diversification Opportunities for Mativ Holdings and Johnson Matthey
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mativ and Johnson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Johnson Matthey Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Matthey Plc 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 Johnson Matthey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Matthey Plc has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Johnson Matthey go up and down completely randomly.
Pair Corralation between Mativ Holdings and Johnson Matthey
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Johnson Matthey. In addition to that, Mativ Holdings is 1.11 times more volatile than Johnson Matthey Plc. It trades about -0.03 of its total potential returns per unit of risk. Johnson Matthey Plc is currently generating about -0.03 per unit of volatility. If you would invest 2,750 in Johnson Matthey Plc on November 2, 2024 and sell it today you would lose (750.00) from holding Johnson Matthey Plc or give up 27.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 37.04% |
Values | Daily Returns |
Mativ Holdings vs. Johnson Matthey Plc
Performance |
Timeline |
Mativ Holdings |
Johnson Matthey Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mativ Holdings and Johnson Matthey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mativ Holdings and Johnson Matthey
The main advantage of trading using opposite Mativ Holdings and Johnson Matthey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Johnson Matthey 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 Johnson Matthey will offset losses from the drop in Johnson Matthey'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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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