Correlation Between Mativ Holdings and V2X
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and V2X 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 V2X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and V2X Inc, you can compare the effects of market volatilities on Mativ Holdings and V2X 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 V2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and V2X.
Diversification Opportunities for Mativ Holdings and V2X
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mativ and V2X is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and V2X Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2X 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 V2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2X Inc has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and V2X go up and down completely randomly.
Pair Corralation between Mativ Holdings and V2X
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the V2X. In addition to that, Mativ Holdings is 1.37 times more volatile than V2X Inc. It trades about -0.02 of its total potential returns per unit of risk. V2X Inc is currently generating about 0.1 per unit of volatility. If you would invest 3,850 in V2X Inc on August 27, 2024 and sell it today you would earn a total of 2,219 from holding V2X Inc or generate 57.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. V2X Inc
Performance |
| Timeline |
| Mativ Holdings |
| V2X Inc |
Mativ Holdings and V2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and V2X
The main advantage of trading using opposite Mativ Holdings and V2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, V2X 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 V2X will offset losses from the drop in V2X'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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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