Correlation Between Mativ Holdings and Stepan
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Stepan 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 Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Stepan Company, you can compare the effects of market volatilities on Mativ Holdings and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Stepan.
Diversification Opportunities for Mativ Holdings and Stepan
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mativ and Stepan is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Stepan go up and down completely randomly.
Pair Corralation between Mativ Holdings and Stepan
Given the investment horizon of 90 days Mativ Holdings is expected to generate 2.58 times more return on investment than Stepan. However, Mativ Holdings is 2.58 times more volatile than Stepan Company. It trades about 0.03 of its potential returns per unit of risk. Stepan Company is currently generating about -0.02 per unit of risk. If you would invest 1,175 in Mativ Holdings on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Mativ Holdings or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Stepan Company
Performance |
| Timeline |
| Mativ Holdings |
| Stepan Company |
Mativ Holdings and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Stepan
The main advantage of trading using opposite Mativ Holdings and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan'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 |
| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world |