Correlation Between Matson and Alexander Baldwin

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

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

Diversification Opportunities for Matson and Alexander Baldwin

-0.57

Correlation Coefficient

Matson  Alexander Baldwin

Excellent diversification

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

Pair Corralation between Matson and Alexander Baldwin

Given the investment horizon of 90 days Matson Inc is expected to generate 1.4 times more return on investment than Alexander Baldwin. However, Matson is 1.4 times more volatile than Alexander Baldwin Holdings. It trades about -0.07 of its potential returns per unit of risk. Alexander Baldwin Holdings is currently generating about -0.21 per unit of risk. If you would invest  10,228  in Matson Inc on July 4, 2025 and sell it today you would lose (288.00) from holding Matson Inc or give up 2.82% of portfolio value over 90 days.

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

Matson Inc  vs.  Alexander Baldwin Holdings

Matson Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Matson Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Alexander Baldwin

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Alexander Baldwin Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Alexander Baldwin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matson and Alexander Baldwin

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

The idea behind Matson Inc and Alexander Baldwin 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.