Correlation Between Mativ Holdings and Nature Wood
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Nature Wood 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 Nature Wood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Nature Wood Group, you can compare the effects of market volatilities on Mativ Holdings and Nature Wood 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 Nature Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Nature Wood.
Diversification Opportunities for Mativ Holdings and Nature Wood
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mativ and Nature is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Nature Wood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature Wood Group 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 Nature Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature Wood Group has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Nature Wood go up and down completely randomly.
Pair Corralation between Mativ Holdings and Nature Wood
Given the investment horizon of 90 days Mativ Holdings is expected to generate 0.61 times more return on investment than Nature Wood. However, Mativ Holdings is 1.63 times less risky than Nature Wood. It trades about 0.0 of its potential returns per unit of risk. Nature Wood Group is currently generating about -0.04 per unit of risk. If you would invest 1,636 in Mativ Holdings on September 12, 2024 and sell it today you would lose (442.00) from holding Mativ Holdings or give up 27.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.47% |
| Values | Daily Returns |
Mativ Holdings vs. Nature Wood Group
Performance |
| Timeline |
| Mativ Holdings |
| Nature Wood Group |
Mativ Holdings and Nature Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Nature Wood
The main advantage of trading using opposite Mativ Holdings and Nature Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Nature Wood 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 Nature Wood will offset losses from the drop in Nature Wood'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 |
| Nature Wood vs. Mativ Holdings | Nature Wood vs. Origin Materials | Nature Wood vs. Waste Management | Nature Wood vs. Stepstone Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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