Correlation Between Six Flags and Mattel

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

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

Diversification Opportunities for Six Flags and Mattel

-0.4

Correlation Coefficient

Six Flags  Mattel

Very good diversification

The 3 months correlation between Six and Mattel is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Six Flags 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 Six Flags Entertainment are associated (or correlated) with Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Six Flags i.e., Six Flags and Mattel go up and down completely randomly.

Pair Corralation between Six Flags and Mattel

Considering the 90-day investment horizon Six Flags Entertainment is expected to under-perform the Mattel. In addition to that, Six Flags is 1.14 times more volatile than Mattel Inc. It trades about -0.15 of its total potential returns per unit of risk. Mattel Inc is currently generating about 0.08 per unit of volatility. If you would invest  1,796  in Mattel Inc on December 27, 2024 and sell it today you would earn a total of  180.00  from holding Mattel Inc or generate 10.02% return on investment over 90 days.

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

Six Flags Entertainment  vs.  Mattel Inc

Six Flags Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mattel Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Mattel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Six Flags and Mattel

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

The idea behind Six Flags Entertainment and Mattel 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.