Correlation Between Alto Ingredients and Mativ Holdings

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

By analyzing existing cross correlation between Alto Ingredients and Mativ Holdings, you can compare the effects of market volatilities on Alto Ingredients 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 Alto Ingredients with a short position of Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alto Ingredients and Mativ Holdings.

Diversification Opportunities for Alto Ingredients and Mativ Holdings

0.89

Correlation Coefficient

Alto Ingredients  Mativ Holdings

Very poor diversification

The 3 months correlation between Alto and Mativ is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Alto Ingredients and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Alto Ingredients 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 Alto Ingredients 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 Alto Ingredients i.e., Alto Ingredients and Mativ Holdings go up and down completely randomly.

Pair Corralation between Alto Ingredients and Mativ Holdings

Given the investment horizon of 90 days Alto Ingredients is expected to generate 1.58 times less return on investment than Mativ Holdings. In addition to that, Alto Ingredients is 1.14 times more volatile than Mativ Holdings. It trades about 0.1 of its total potential returns per unit of risk. Mativ Holdings is currently generating about 0.19 per unit of volatility. If you would invest  502.00  in Mativ Holdings on May 1, 2025 and sell it today you would earn a total of  226.00  from holding Mativ Holdings or generate 45.02% return on investment over 90 days.

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

Alto Ingredients  vs.  Mativ Holdings

Alto Ingredients

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alto Ingredients are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alto Ingredients displayed solid returns over the last few months and may actually be approaching a breakup point.

Mativ Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mativ Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Mativ Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alto Ingredients and Mativ Holdings

The main advantage of trading using opposite Alto Ingredients and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alto Ingredients 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.

The idea behind Alto Ingredients and Mativ Holdings 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..