Correlation Between Mattel and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Mattel and NioCorp Developments 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 NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and NioCorp Developments Ltd, you can compare the effects of market volatilities on Mattel and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and NioCorp Developments.
Diversification Opportunities for Mattel and NioCorp Developments
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mattel and NioCorp is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Mattel i.e., Mattel and NioCorp Developments go up and down completely randomly.
Pair Corralation between Mattel and NioCorp Developments
Considering the 90-day investment horizon Mattel is expected to generate 16.79 times less return on investment than NioCorp Developments. But when comparing it to its historical volatility, Mattel Inc is 3.04 times less risky than NioCorp Developments. It trades about 0.06 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 141.00 in NioCorp Developments Ltd on October 23, 2024 and sell it today you would earn a total of 27.00 from holding NioCorp Developments Ltd or generate 19.15% 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. NioCorp Developments Ltd
Performance |
| Timeline |
| Mattel Inc |
| NioCorp Developments |
Mattel and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and NioCorp Developments
The main advantage of trading using opposite Mattel and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| NioCorp Developments vs. Sea | NioCorp Developments vs. Tenaris SA ADR | NioCorp Developments vs. Helmerich and Payne | NioCorp Developments vs. Asbury Automotive Group |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |