Correlation Between Chicago Atlantic and Mattel

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

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

Diversification Opportunities for Chicago Atlantic and Mattel

0.06

Correlation Coefficient

Chicago Atlantic  Mattel

Significant diversification

The 3 months correlation between Chicago and Mattel is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Chicago Atlantic 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 Chicago Atlantic BDC, 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 Chicago Atlantic i.e., Chicago Atlantic and Mattel go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Mattel

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to generate 1.27 times more return on investment than Mattel. However, Chicago Atlantic is 1.27 times more volatile than Mattel Inc. It trades about -0.04 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.16 per unit of risk. If you would invest  1,249  in Chicago Atlantic BDC, on October 4, 2024 and sell it today you would lose (30.00) from holding Chicago Atlantic BDC, or give up 2.4% of portfolio value over 90 days.

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

Chicago Atlantic BDC,  vs.  Mattel Inc

Chicago Atlantic BDC,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Mattel Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mattel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chicago Atlantic and Mattel

The main advantage of trading using opposite Chicago Atlantic and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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 Chicago Atlantic BDC, 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.