Correlation Between Mativ Holdings and Founder Group

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

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

Diversification Opportunities for Mativ Holdings and Founder Group

-0.13

Correlation Coefficient

Mativ Holdings  Founder Group

Good diversification

The 3 months correlation between Mativ and Founder is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Founder Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Founder Group Limited 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 Founder Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Founder Group Limited has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Founder Group go up and down completely randomly.

Pair Corralation between Mativ Holdings and Founder Group

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Founder Group. But the stock apears to be less risky and, when comparing its historical volatility, Mativ Holdings is 3.8 times less risky than Founder Group. The stock trades about -0.14 of its potential returns per unit of risk. The Founder Group Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  316.00  in Founder Group Limited on September 23, 2024 and sell it today you would lose (145.00) from holding Founder Group Limited or give up 45.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mativ Holdings  vs.  Founder Group Limited

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.

Founder Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Founder Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mativ Holdings and Founder Group

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

The idea behind Mativ Holdings and Founder Group Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.