Correlation Between Select Energy and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Select Energy 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 Select Energy and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Energy Services and Mativ Holdings, you can compare the effects of market volatilities on Select Energy 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 Select Energy with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and Mativ Holdings.
Diversification Opportunities for Select Energy and Mativ Holdings
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and Mativ is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Select Energy 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 Select Energy Services 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 Select Energy i.e., Select Energy and Mativ Holdings go up and down completely randomly.
Pair Corralation between Select Energy and Mativ Holdings
Given the investment horizon of 90 days Select Energy Services is expected to generate 0.59 times more return on investment than Mativ Holdings. However, Select Energy Services is 1.7 times less risky than Mativ Holdings. It trades about 0.09 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.01 per unit of risk. If you would invest 716.00 in Select Energy Services on August 30, 2024 and sell it today you would earn a total of 751.00 from holding Select Energy Services or generate 104.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Energy Services vs. Mativ Holdings
Performance |
| Timeline |
| Select Energy Services |
| Mativ Holdings |
Select Energy and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and Mativ Holdings
The main advantage of trading using opposite Select Energy and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy 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.| Select Energy vs. Orion Engineered Carbons | Select Energy vs. Element Solutions | Select Energy vs. Kronos Worldwide | Select Energy vs. FutureFuel Corp |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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