Correlation Between Mattel and Neogen
Can any of the company-specific risk be diversified away by investing in both Mattel and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Neogen, you can compare the effects of market volatilities on Mattel and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Neogen.
Diversification Opportunities for Mattel and Neogen
Significant diversification
The 3 months correlation between Mattel and Neogen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Mattel i.e., Mattel and Neogen go up and down completely randomly.
Pair Corralation between Mattel and Neogen
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.77 times more return on investment than Neogen. However, Mattel Inc is 1.29 times less risky than Neogen. It trades about 0.03 of its potential returns per unit of risk. Neogen is currently generating about -0.08 per unit of risk. If you would invest 1,890 in Mattel Inc on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Mattel Inc or generate 1.64% 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. Neogen
Performance |
| Timeline |
| Mattel Inc |
| Neogen |
Mattel and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Neogen
The main advantage of trading using opposite Mattel and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Mattel vs. Clarus Corp | Mattel vs. Escalade Incorporated | Mattel vs. Johnson Outdoors | Mattel vs. JAKKS Pacific |
| Neogen vs. Avita Medical | Neogen vs. Sight Sciences | Neogen vs. Treace Medical Concepts | Neogen vs. Neuropace |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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