Correlation Between Mattel and Hasbro
Can any of the company-specific risk be diversified away by investing in both Mattel and Hasbro 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 Hasbro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Hasbro Inc, you can compare the effects of market volatilities on Mattel and Hasbro 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 Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Hasbro.
Diversification Opportunities for Mattel and Hasbro
Significant diversification
The 3 months correlation between Mattel and Hasbro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro 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 Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Mattel i.e., Mattel and Hasbro go up and down completely randomly.
Pair Corralation between Mattel and Hasbro
Considering the 90-day investment horizon Mattel Inc is expected to under-perform the Hasbro. In addition to that, Mattel is 1.19 times more volatile than Hasbro Inc. It trades about 0.0 of its total potential returns per unit of risk. Hasbro Inc is currently generating about 0.08 per unit of volatility. If you would invest 4,866 in Hasbro Inc on August 27, 2024 and sell it today you would earn a total of 1,386 from holding Hasbro Inc or generate 28.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mattel Inc vs. Hasbro Inc
Performance |
Timeline |
Mattel Inc |
Hasbro Inc |
Mattel and Hasbro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mattel and Hasbro
The main advantage of trading using opposite Mattel and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.Mattel vs. MCBC Holdings | Mattel vs. Winnebago Industries | Mattel vs. LCI Industries | Mattel vs. Thor Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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