Correlation Between Mativ Holdings and Select Energy
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Select Energy 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 Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Select Energy Services, you can compare the effects of market volatilities on Mativ Holdings and Select Energy 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 Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Select Energy.
Diversification Opportunities for Mativ Holdings and Select Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mativ and Select is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services 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 Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Select Energy go up and down completely randomly.
Pair Corralation between Mativ Holdings and Select Energy
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Select Energy. In addition to that, Mativ Holdings is 1.44 times more volatile than Select Energy Services. It trades about 0.0 of its total potential returns per unit of risk. Select Energy Services is currently generating about 0.06 per unit of volatility. If you would invest 771.00 in Select Energy Services on September 2, 2024 and sell it today you would earn a total of 706.00 from holding Select Energy Services or generate 91.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. Select Energy Services
Performance |
| Timeline |
| Mativ Holdings |
| Select Energy Services |
Mativ Holdings and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Select Energy
The main advantage of trading using opposite Mativ Holdings and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Select Energy 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 Select Energy will offset losses from the drop in Select Energy'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 |
| Select Energy vs. Orion Engineered Carbons | Select Energy vs. Element Solutions | Select Energy vs. Kronos Worldwide | Select Energy 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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