Correlation Between Ecolab and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Ecolab 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 Ecolab and Mativ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Mativ Holdings, you can compare the effects of market volatilities on Ecolab 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 Ecolab with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Mativ Holdings.
Diversification Opportunities for Ecolab and Mativ Holdings
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ecolab and Mativ is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Ecolab 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 Ecolab Inc 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 Ecolab i.e., Ecolab and Mativ Holdings go up and down completely randomly.
Pair Corralation between Ecolab and Mativ Holdings
Considering the 90-day investment horizon Ecolab is expected to generate 4.16 times less return on investment than Mativ Holdings. But when comparing it to its historical volatility, Ecolab Inc is 3.26 times less risky than Mativ Holdings. It trades about 0.18 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 462.00 in Mativ Holdings on April 15, 2025 and sell it today you would earn a total of 285.00 from holding Mativ Holdings or generate 61.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Mativ Holdings
Performance |
| Timeline |
| Ecolab Inc |
| Mativ Holdings |
Ecolab and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Mativ Holdings
The main advantage of trading using opposite Ecolab and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab 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.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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