Correlation Between Mattel and ReWalk Robotics
Can any of the company-specific risk be diversified away by investing in both Mattel and ReWalk Robotics 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 ReWalk Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and ReWalk Robotics, you can compare the effects of market volatilities on Mattel and ReWalk Robotics 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 ReWalk Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and ReWalk Robotics.
Diversification Opportunities for Mattel and ReWalk Robotics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mattel and ReWalk is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and ReWalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReWalk Robotics 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 ReWalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReWalk Robotics has no effect on the direction of Mattel i.e., Mattel and ReWalk Robotics go up and down completely randomly.
Pair Corralation between Mattel and ReWalk Robotics
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.33 times more return on investment than ReWalk Robotics. However, Mattel Inc is 2.99 times less risky than ReWalk Robotics. It trades about 0.0 of its potential returns per unit of risk. ReWalk Robotics is currently generating about -0.07 per unit of risk. If you would invest 1,902 in Mattel Inc on October 29, 2024 and sell it today you would lose (84.00) from holding Mattel Inc or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. ReWalk Robotics
Performance |
| Timeline |
| Mattel Inc |
| ReWalk Robotics |
Mattel and ReWalk Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and ReWalk Robotics
The main advantage of trading using opposite Mattel and ReWalk Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, ReWalk Robotics 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 ReWalk Robotics will offset losses from the drop in ReWalk Robotics' long position.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| ReWalk Robotics vs. NorthWestern | ReWalk Robotics vs. Starwin Media Holdings | ReWalk Robotics vs. Glorywin Entertainment Group | ReWalk Robotics vs. National CineMedia |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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