Correlation Between Sealed Air and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Mativ Holdings 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 Sealed Air and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Mativ Holdings, you can compare the effects of market volatilities on Sealed Air and Mativ Holdings 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 Sealed Air with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Mativ Holdings.
Diversification Opportunities for Sealed Air and Mativ Holdings
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sealed and Mativ is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Sealed Air 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 Sealed Air are associated (or correlated) with Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Sealed Air i.e., Sealed Air and Mativ Holdings go up and down completely randomly.
Pair Corralation between Sealed Air and Mativ Holdings
Considering the 90-day investment horizon Sealed Air is expected to generate 2.76 times less return on investment than Mativ Holdings. But when comparing it to its historical volatility, Sealed Air is 2.46 times less risky than Mativ Holdings. It trades about 0.03 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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 |
Sealed Air vs. Mativ Holdings
Performance |
| Timeline |
| Sealed Air |
| Mativ Holdings |
Sealed Air and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Mativ Holdings
The main advantage of trading using opposite Sealed Air and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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