Correlation Between Mativ Holdings and Loandepot
Can any of the company-specific risk be diversified away by investing in both Mativ Holdings and Loandepot 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 Loandepot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mativ Holdings and Loandepot, you can compare the effects of market volatilities on Mativ Holdings and Loandepot 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 Loandepot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Loandepot.
Diversification Opportunities for Mativ Holdings and Loandepot
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mativ and Loandepot is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and Loandepot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loandepot 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 Loandepot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loandepot has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and Loandepot go up and down completely randomly.
Pair Corralation between Mativ Holdings and Loandepot
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Loandepot. But the stock apears to be less risky and, when comparing its historical volatility, Mativ Holdings is 1.18 times less risky than Loandepot. The stock trades about -0.15 of its potential returns per unit of risk. The Loandepot is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Loandepot on September 25, 2024 and sell it today you would lose (71.00) from holding Loandepot or give up 26.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mativ Holdings vs. Loandepot
Performance |
Timeline |
Mativ Holdings |
Loandepot |
Mativ Holdings and Loandepot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mativ Holdings and Loandepot
The main advantage of trading using opposite Mativ Holdings and Loandepot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ Holdings position performs unexpectedly, Loandepot 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 Loandepot will offset losses from the drop in Loandepot'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 |
Loandepot vs. Mr Cooper Group | Loandepot vs. Encore Capital Group | Loandepot vs. CNFinance Holdings | Loandepot vs. Security National Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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