Correlation Between Mativ Holdings and Nike
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Nike 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 Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Nike Inc, you can compare the effects of market volatilities on Mativ Holdings and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Nike.
Diversification Opportunities for Mativ Holdings and Nike
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mativ and Nike is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Nike go up and down completely randomly.
Pair Corralation between Mativ Holdings and Nike
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Nike. In addition to that, Mativ Holdings is 2.1 times more volatile than Nike Inc. It trades about -0.1 of its total potential returns per unit of risk. Nike Inc is currently generating about -0.04 per unit of volatility. If you would invest 8,241 in Nike Inc on August 28, 2024 and sell it today you would lose (480.00) from holding Nike Inc or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Nike Inc
Performance |
| Timeline |
| Mativ Holdings |
| Nike Inc |
Mativ Holdings and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Nike
The main advantage of trading using opposite Mativ Holdings and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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