Correlation Between Mercer International and Mativ Holdings

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

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

Diversification Opportunities for Mercer International and Mativ Holdings

0.14

Correlation Coefficient

Mercer International  Mativ Holdings

Average diversification

The 3 months correlation between Mercer and Mativ is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mercer International and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Mercer International 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 Mercer International 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 Mercer International i.e., Mercer International and Mativ Holdings go up and down completely randomly.

Pair Corralation between Mercer International and Mativ Holdings

Given the investment horizon of 90 days Mercer International is expected to under-perform the Mativ Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Mercer International is 1.17 times less risky than Mativ Holdings. The stock trades about -0.27 of its potential returns per unit of risk. The Mativ Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,147  in Mativ Holdings on August 17, 2025 and sell it today you would earn a total of  128.00  from holding Mativ Holdings or generate 11.16% return on investment over 90 days.

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

Mercer International  vs.  Mativ Holdings

Mercer International

Risk-Adjusted Performance

Weakest

Over the last 90 days Mercer International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Mativ Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Mativ Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mativ Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercer International and Mativ Holdings

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

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.