Correlation Between Games Workshop and Mattel
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Mattel 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 Games Workshop and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Games Workshop Group and Mattel Inc, you can compare the effects of market volatilities on Games Workshop and Mattel 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 Games Workshop with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Mattel.
Diversification Opportunities for Games Workshop and Mattel
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Games and Mattel is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Games Workshop 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 Games Workshop Group are associated (or correlated) with Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Games Workshop i.e., Games Workshop and Mattel go up and down completely randomly.
Pair Corralation between Games Workshop and Mattel
Assuming the 90 days horizon Games Workshop Group is expected to generate 1.61 times more return on investment than Mattel. However, Games Workshop is 1.61 times more volatile than Mattel Inc. It trades about 0.07 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.02 per unit of risk. If you would invest 8,755 in Games Workshop Group on September 3, 2024 and sell it today you would earn a total of 8,545 from holding Games Workshop Group or generate 97.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.61% |
| Values | Daily Returns |
Games Workshop Group vs. Mattel Inc
Performance |
| Timeline |
| Games Workshop Group |
| Mattel Inc |
Games Workshop and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Mattel
The main advantage of trading using opposite Games Workshop and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel's long position.| Games Workshop vs. HUMANA INC | Games Workshop vs. Aquagold International | Games Workshop vs. Barloworld Ltd ADR | Games Workshop vs. Morningstar Unconstrained Allocation |
| Mattel vs. Funko Inc | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group | Mattel vs. Six Flags Entertainment |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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