Correlation Between NVent Electric and Matson

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

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

Diversification Opportunities for NVent Electric and Matson

-0.53

Correlation Coefficient

NVent Electric  Matson

Excellent diversification

The 3 months correlation between NVent and Matson is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding nVent Electric PLC and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc and NVent Electric 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 nVent Electric PLC are associated (or correlated) with Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of NVent Electric i.e., NVent Electric and Matson go up and down completely randomly.

Pair Corralation between NVent Electric and Matson

Considering the 90-day investment horizon nVent Electric PLC is expected to generate 1.17 times more return on investment than Matson. However, NVent Electric is 1.17 times more volatile than Matson Inc. It trades about 0.2 of its potential returns per unit of risk. Matson Inc is currently generating about -0.08 per unit of risk. If you would invest  6,639  in nVent Electric PLC on May 19, 2025 and sell it today you would earn a total of  2,162  from holding nVent Electric PLC or generate 32.57% return on investment over 90 days.

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

nVent Electric PLC  vs.  Matson Inc

nVent Electric PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in nVent Electric PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NVent Electric unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with NVent Electric and Matson

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

The idea behind nVent Electric PLC and Matson Inc 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 CEOs Directory module to screen CEOs from public companies around the world.