Correlation Between Mattel and Global Gas
Can any of the company-specific risk be diversified away by investing in both Mattel and Global Gas 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 Global Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Global Gas, you can compare the effects of market volatilities on Mattel and Global Gas 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 Global Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Global Gas.
Diversification Opportunities for Mattel and Global Gas
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mattel and Global is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Global Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gas 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 Global Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gas has no effect on the direction of Mattel i.e., Mattel and Global Gas go up and down completely randomly.
Pair Corralation between Mattel and Global Gas
Considering the 90-day investment horizon Mattel is expected to generate 85.7 times less return on investment than Global Gas. But when comparing it to its historical volatility, Mattel Inc is 14.27 times less risky than Global Gas. It trades about 0.02 of its potential returns per unit of risk. Global Gas is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.51 in Global Gas on September 3, 2024 and sell it today you would lose (0.51) from holding Global Gas or give up 33.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.27% |
| Values | Daily Returns |
Mattel Inc vs. Global Gas
Performance |
| Timeline |
| Mattel Inc |
| Global Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mattel and Global Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Global Gas
The main advantage of trading using opposite Mattel and Global Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Global Gas 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 Global Gas will offset losses from the drop in Global Gas' long position.| Mattel vs. Funko Inc | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group | Mattel vs. Six Flags Entertainment |
| Global Gas vs. Perseus Mining Limited | Global Gas vs. Senmiao Technology | Global Gas vs. Paiute Oil Mining | Global Gas vs. BioNTech SE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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