Correlation Between Mattel and Oriental Land

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

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

Diversification Opportunities for Mattel and Oriental Land

0.05

Correlation Coefficient

Mattel  Oriental Land

Significant diversification

The 3 months correlation between Mattel and Oriental is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land 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 Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of Mattel i.e., Mattel and Oriental Land go up and down completely randomly.

Pair Corralation between Mattel and Oriental Land

Considering the 90-day investment horizon Mattel Inc is expected to generate 1.14 times more return on investment than Oriental Land. However, Mattel is 1.14 times more volatile than Oriental Land Co. It trades about 0.0 of its potential returns per unit of risk. Oriental Land Co is currently generating about -0.18 per unit of risk. If you would invest  1,902  in Mattel Inc on September 14, 2024 and sell it today you would lose (15.50) from holding Mattel Inc or give up 0.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Mattel Inc  vs.  Oriental Land Co

Mattel Inc

Risk-Adjusted Performance

0 of 100

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Oriental Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Land Co 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 essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mattel and Oriental Land

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

The idea behind Mattel Inc and Oriental Land Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.