Correlation Between Mativ Holdings and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Westrock Coffee 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 Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Westrock Coffee, you can compare the effects of market volatilities on Mativ Holdings and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Westrock Coffee.
Diversification Opportunities for Mativ Holdings and Westrock Coffee
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mativ and Westrock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Westrock Coffee go up and down completely randomly.
Pair Corralation between Mativ Holdings and Westrock Coffee
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Westrock Coffee. In addition to that, Mativ Holdings is 1.21 times more volatile than Westrock Coffee. It trades about -0.16 of its total potential returns per unit of risk. Westrock Coffee is currently generating about 0.09 per unit of volatility. If you would invest 636.00 in Westrock Coffee on September 13, 2024 and sell it today you would earn a total of 73.00 from holding Westrock Coffee or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mativ Holdings vs. Westrock Coffee
Performance |
| Timeline |
| Mativ Holdings |
| Westrock Coffee |
Mativ Holdings and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Westrock Coffee
The main advantage of trading using opposite Mativ Holdings and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee'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 |
| Westrock Coffee vs. General Mills | Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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