Correlation Between Mattel and Fernhill Beverage

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

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

Diversification Opportunities for Mattel and Fernhill Beverage

0.0

Correlation Coefficient

Mattel  Fernhill Beverage

Pay attention - limited upside

The 3 months correlation between Mattel and Fernhill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Fernhill Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fernhill Beverage 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 Fernhill Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fernhill Beverage has no effect on the direction of Mattel i.e., Mattel and Fernhill Beverage go up and down completely randomly.

Pair Corralation between Mattel and Fernhill Beverage

If you would invest  0.01  in Fernhill Beverage on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Fernhill Beverage or generate 0.0% return on investment over 90 days.

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

Mattel Inc  vs.  Fernhill Beverage

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.

Fernhill Beverage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fernhill Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Fernhill Beverage is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mattel and Fernhill Beverage

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

The idea behind Mattel Inc and Fernhill Beverage 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.