Correlation Between Mattel and 909319AA3

Can any of the company-specific risk be diversified away by investing in both Mattel and 909319AA3 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 909319AA3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mattel Inc and US909319AA30, you can compare the effects of market volatilities on Mattel and 909319AA3 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 909319AA3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and 909319AA3.

Diversification Opportunities for Mattel and 909319AA3

0.16

Correlation Coefficient

Mattel  909319AA3

Average diversification

The 3 months correlation between Mattel and 909319AA3 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and US909319AA30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US909319AA30 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 909319AA3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US909319AA30 has no effect on the direction of Mattel i.e., Mattel and 909319AA3 go up and down completely randomly.

Pair Corralation between Mattel and 909319AA3

Considering the 90-day investment horizon Mattel Inc is expected to under-perform the 909319AA3. In addition to that, Mattel is 2.6 times more volatile than US909319AA30. It trades about -0.07 of its total potential returns per unit of risk. US909319AA30 is currently generating about -0.08 per unit of volatility. If you would invest  9,856  in US909319AA30 on October 27, 2024 and sell it today you would lose (207.00) from holding US909319AA30 or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Mattel Inc  vs.  US909319AA30

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.

US909319AA30

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US909319AA30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 909319AA3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mattel and 909319AA3

The main advantage of trading using opposite Mattel and 909319AA3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, 909319AA3 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 909319AA3 will offset losses from the drop in 909319AA3's long position.

The idea behind Mattel Inc and US909319AA30 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.