Correlation Between Mattel and CAVA Group,

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

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

Diversification Opportunities for Mattel and CAVA Group,

0.32

Correlation Coefficient

Mattel  CAVA Group,

Weak diversification

The 3 months correlation between Mattel and CAVA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Mattel i.e., Mattel and CAVA Group, go up and down completely randomly.

Pair Corralation between Mattel and CAVA Group,

Considering the 90-day investment horizon Mattel Inc is expected to generate 0.51 times more return on investment than CAVA Group,. However, Mattel Inc is 1.96 times less risky than CAVA Group,. It trades about -0.15 of its potential returns per unit of risk. CAVA Group, is currently generating about -0.28 per unit of risk. If you would invest  1,902  in Mattel Inc on September 30, 2024 and sell it today you would lose (106.00) from holding Mattel Inc or give up 5.57% of portfolio value over 90 days.

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

Mattel Inc  vs.  CAVA Group,

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 comparatively stable basic indicators, Mattel is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CAVA Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAVA Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CAVA Group, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mattel and CAVA Group,

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

The idea behind Mattel Inc and CAVA Group, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.