Correlation Between JAKKS Pacific and Mattel
Can any of the company-specific risk be diversified away by investing in both JAKKS Pacific 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 JAKKS Pacific and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAKKS Pacific and Mattel Inc, you can compare the effects of market volatilities on JAKKS Pacific 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 JAKKS Pacific with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAKKS Pacific and Mattel.
Diversification Opportunities for JAKKS Pacific and Mattel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JAKKS and Mattel is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JAKKS Pacific and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and JAKKS Pacific 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 JAKKS Pacific 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 JAKKS Pacific i.e., JAKKS Pacific and Mattel go up and down completely randomly.
Pair Corralation between JAKKS Pacific and Mattel
Given the investment horizon of 90 days JAKKS Pacific is expected to under-perform the Mattel. In addition to that, JAKKS Pacific is 1.8 times more volatile than Mattel Inc. It trades about -0.01 of its total potential returns per unit of risk. Mattel Inc is currently generating about 0.0 per unit of volatility. If you would invest 1,970 in Mattel Inc on August 27, 2024 and sell it today you would lose (101.00) from holding Mattel Inc or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAKKS Pacific vs. Mattel Inc
Performance |
| Timeline |
| JAKKS Pacific |
| Mattel Inc |
JAKKS Pacific and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAKKS Pacific and Mattel
The main advantage of trading using opposite JAKKS Pacific and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAKKS Pacific 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.| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor Brands |
| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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