Correlation Between Mativ Holdings and REPUBLIC

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Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and REPUBLIC 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 REPUBLIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and REPUBLIC SERVICES INC, you can compare the effects of market volatilities on Mativ Holdings and REPUBLIC 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 REPUBLIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and REPUBLIC.

Diversification Opportunities for Mativ Holdings and REPUBLIC

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Mativ and REPUBLIC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and REPUBLIC SERVICES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REPUBLIC SERVICES 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 REPUBLIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REPUBLIC SERVICES INC has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and REPUBLIC go up and down completely randomly.

Pair Corralation between Mativ Holdings and REPUBLIC

Given the investment horizon of 90 days Mativ Holdings is expected to generate 8.63 times more return on investment than REPUBLIC. However, Mativ Holdings is 8.63 times more volatile than REPUBLIC SERVICES INC. It trades about 0.03 of its potential returns per unit of risk. REPUBLIC SERVICES INC is currently generating about 0.01 per unit of risk. If you would invest  1,166  in Mativ Holdings on September 4, 2024 and sell it today you would earn a total of  109.00  from holding Mativ Holdings or generate 9.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.19%
ValuesDaily Returns

Mativ Holdings  vs.  REPUBLIC SERVICES INC

 Performance 
       Timeline  
Mativ Holdings 

Risk-Adjusted Performance

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Over the last 90 days Mativ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
REPUBLIC SERVICES INC 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days REPUBLIC SERVICES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, REPUBLIC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Mativ Holdings and REPUBLIC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mativ Holdings and REPUBLIC

The main advantage of trading using opposite Mativ Holdings and REPUBLIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, REPUBLIC 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 REPUBLIC will offset losses from the drop in REPUBLIC's long position.
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The idea behind Mativ Holdings and REPUBLIC SERVICES INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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