Correlation Between Mativ Holdings and Core Molding

Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Core Molding 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 Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mativ Holdings and Core Molding Technologies, you can compare the effects of market volatilities on Mativ Holdings and Core Molding 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 Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Core Molding.

Diversification Opportunities for Mativ Holdings and Core Molding

0.4

Correlation Coefficient

Mativ Holdings  Core Molding

Very weak diversification

The 3 months correlation between Mativ and Core is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies 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 Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Core Molding go up and down completely randomly.

Pair Corralation between Mativ Holdings and Core Molding

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Core Molding. In addition to that, Mativ Holdings is 1.08 times more volatile than Core Molding Technologies. It trades about -0.12 of its total potential returns per unit of risk. Core Molding Technologies is currently generating about -0.04 per unit of volatility. If you would invest  1,665  in Core Molding Technologies on September 13, 2024 and sell it today you would lose (49.00) from holding Core Molding Technologies or give up 2.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Mativ Holdings  vs.  Core Molding Technologies

Mativ Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mativ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Core Molding Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Molding Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mativ Holdings and Core Molding

The main advantage of trading using opposite Mativ Holdings and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.

The idea behind Mativ Holdings and Core Molding Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.