Correlation Between Mativ Holdings and ESCO Technologies

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

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

Diversification Opportunities for Mativ Holdings and ESCO Technologies

0.57

Correlation Coefficient

Mativ Holdings  ESCO Technologies

Very weak diversification

The 3 months correlation between Mativ and ESCO is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mativ Holdings and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies 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 ESCO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESCO Technologies has no effect on the direction of Mativ Holdings i.e., Mativ Holdings and ESCO Technologies go up and down completely randomly.

Pair Corralation between Mativ Holdings and ESCO Technologies

Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the ESCO Technologies. In addition to that, Mativ Holdings is 1.61 times more volatile than ESCO Technologies. It trades about -0.5 of its total potential returns per unit of risk. ESCO Technologies is currently generating about -0.05 per unit of volatility. If you would invest  21,024  in ESCO Technologies on July 13, 2025 and sell it today you would lose (323.00) from holding ESCO Technologies or give up 1.54% of portfolio value over 90 days.

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

Mativ Holdings  vs.  ESCO Technologies

Mativ Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mativ Holdings are ranked lower than 7 (%) 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.

ESCO Technologies

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ESCO Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ESCO Technologies may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Mativ Holdings and ESCO Technologies

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

The idea behind Mativ Holdings and ESCO Technologies 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.