Correlation Between Mattel and Johnson Outdoors
Can any of the company-specific risk be diversified away by investing in both Mattel and Johnson Outdoors 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 Johnson Outdoors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Johnson Outdoors, you can compare the effects of market volatilities on Mattel and Johnson Outdoors 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 Johnson Outdoors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Johnson Outdoors.
Diversification Opportunities for Mattel and Johnson Outdoors
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mattel and Johnson is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Johnson Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Outdoors 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 Johnson Outdoors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Outdoors has no effect on the direction of Mattel i.e., Mattel and Johnson Outdoors go up and down completely randomly.
Pair Corralation between Mattel and Johnson Outdoors
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.95 times more return on investment than Johnson Outdoors. However, Mattel Inc is 1.06 times less risky than Johnson Outdoors. It trades about 0.0 of its potential returns per unit of risk. Johnson Outdoors is currently generating about -0.05 per unit of risk. If you would invest 2,066 in Mattel Inc on August 27, 2024 and sell it today you would lose (197.00) from holding Mattel Inc or give up 9.54% 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. Johnson Outdoors
Performance |
| Timeline |
| Mattel Inc |
| Johnson Outdoors |
Mattel and Johnson Outdoors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Johnson Outdoors
The main advantage of trading using opposite Mattel and Johnson Outdoors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Johnson Outdoors 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 Johnson Outdoors will offset losses from the drop in Johnson Outdoors' long position.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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