Correlation Between Mattr Corp and Constellation Software

Can any of the company-specific risk be diversified away by investing in both Mattr Corp and Constellation Software 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 Mattr Corp and Constellation Software into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Mattr Corp and Constellation Software

0.22

Correlation Coefficient

Mattr Corp  Constellation Software

Modest diversification

The 3 months correlation between Mattr and Constellation is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mattr Corp and Constellation Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Software and Mattr Corp 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 Mattr Corp are associated (or correlated) with Constellation Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Software has no effect on the direction of Mattr Corp i.e., Mattr Corp and Constellation Software go up and down completely randomly.

Pair Corralation between Mattr Corp and Constellation Software

Assuming the 90 days trading horizon Mattr Corp is expected to generate 2.03 times more return on investment than Constellation Software. However, Mattr Corp is 2.03 times more volatile than Constellation Software. It trades about 0.08 of its potential returns per unit of risk. Constellation Software is currently generating about -0.08 per unit of risk. If you would invest  970.00  in Mattr Corp on May 28, 2025 and sell it today you would earn a total of  136.00  from holding Mattr Corp or generate 14.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Mattr Corp  vs.  Constellation Software

Mattr Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Mattr Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mattr Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Constellation Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Constellation Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Mattr Corp and Constellation Software

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

The idea behind Mattr Corp and Constellation Software 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.