Correlation Between Mattel and Asure Software

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

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

Diversification Opportunities for Mattel and Asure Software

0.1

Correlation Coefficient

Mattel  Asure Software

Average diversification

The 3 months correlation between Mattel and Asure is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Mattel 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 Mattel Inc are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Mattel i.e., Mattel and Asure Software go up and down completely randomly.

Pair Corralation between Mattel and Asure Software

Considering the 90-day investment horizon Mattel Inc is expected to generate 0.71 times more return on investment than Asure Software. However, Mattel Inc is 1.4 times less risky than Asure Software. It trades about 0.07 of its potential returns per unit of risk. Asure Software is currently generating about 0.04 per unit of risk. If you would invest  1,796  in Mattel Inc on December 27, 2024 and sell it today you would earn a total of  171.00  from holding Mattel Inc or generate 9.52% return on investment over 90 days.

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

Mattel Inc  vs.  Asure Software

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.

Asure Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Asure Software may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mattel and Asure Software

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

The idea behind Mattel Inc and Asure Software 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.