Correlation Between Mattel and BRP
Can any of the company-specific risk be diversified away by investing in both Mattel and BRP 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 BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and BRP Inc, you can compare the effects of market volatilities on Mattel and BRP 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 BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and BRP.
Diversification Opportunities for Mattel and BRP
Very good diversification
The 3 months correlation between Mattel and BRP is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Mattel i.e., Mattel and BRP go up and down completely randomly.
Pair Corralation between Mattel and BRP
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.65 times more return on investment than BRP. However, Mattel Inc is 1.54 times less risky than BRP. It trades about 0.0 of its potential returns per unit of risk. BRP Inc is currently generating about -0.02 per unit of risk. If you would invest 1,880 in Mattel Inc on November 6, 2024 and sell it today you would lose (16.00) from holding Mattel Inc or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. BRP Inc
Performance |
| Timeline |
| Mattel Inc |
| BRP Inc |
Mattel and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and BRP
The main advantage of trading using opposite Mattel and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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