Correlation Between Mattel and Callaway Golf
Can any of the company-specific risk be diversified away by investing in both Mattel and Callaway Golf 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 Callaway Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Callaway Golf, you can compare the effects of market volatilities on Mattel and Callaway Golf 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 Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Callaway Golf.
Diversification Opportunities for Mattel and Callaway Golf
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mattel and Callaway is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf 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 Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of Mattel i.e., Mattel and Callaway Golf go up and down completely randomly.
Pair Corralation between Mattel and Callaway Golf
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.78 times more return on investment than Callaway Golf. However, Mattel Inc is 1.28 times less risky than Callaway Golf. It trades about 0.07 of its potential returns per unit of risk. Callaway Golf is currently generating about -0.21 per unit of risk. If you would invest 1,778 in Mattel Inc on August 24, 2024 and sell it today you would earn a total of 60.00 from holding Mattel Inc or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. Callaway Golf
Performance |
| Timeline |
| Mattel Inc |
| Callaway Golf |
Mattel and Callaway Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Callaway Golf
The main advantage of trading using opposite Mattel and Callaway Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Callaway Golf 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 Callaway Golf will offset losses from the drop in Callaway Golf's long position.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| Callaway Golf vs. Bowlero Corp | Callaway Golf vs. Johnson Outdoors | Callaway Golf vs. YETI Holdings | Callaway Golf vs. Xponential Fitness |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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