Correlation Between Precision Optics, and Mativ Holdings

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

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

Diversification Opportunities for Precision Optics, and Mativ Holdings

0.83

Correlation Coefficient

Precision Optics,  Mativ Holdings

Very poor diversification

The 3 months correlation between Precision and Mativ is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Precision Optics, and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings and Precision Optics, 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 Precision Optics, 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 Precision Optics, i.e., Precision Optics, and Mativ Holdings go up and down completely randomly.

Pair Corralation between Precision Optics, and Mativ Holdings

Given the investment horizon of 90 days Precision Optics, is expected to generate 2.21 times less return on investment than Mativ Holdings. But when comparing it to its historical volatility, Precision Optics, is 1.25 times less risky than Mativ Holdings. It trades about 0.07 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Mativ Holdings on May 3, 2025 and sell it today you would earn a total of  147.00  from holding Mativ Holdings or generate 28.54% return on investment over 90 days.

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

Precision Optics,  vs.  Mativ Holdings

Precision Optics,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Optics, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Precision Optics, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Mativ Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mativ Holdings are ranked lower than 10 (%) 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.

Pair Trading with Precision Optics, and Mativ Holdings

The main advantage of trading using opposite Precision Optics, and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Optics, 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 Precision Optics, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.