Correlation Between Mattel and Round One
Can any of the company-specific risk be diversified away by investing in both Mattel and Round One 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 Round One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Round One, you can compare the effects of market volatilities on Mattel and Round One 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 Round One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Round One.
Diversification Opportunities for Mattel and Round One
Good diversification
The 3 months correlation between Mattel and Round is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Round One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Round One 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 Round One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Round One has no effect on the direction of Mattel i.e., Mattel and Round One go up and down completely randomly.
Pair Corralation between Mattel and Round One
Considering the 90-day investment horizon Mattel Inc is expected to generate 0.02 times more return on investment than Round One. However, Mattel Inc is 58.74 times less risky than Round One. It trades about 0.02 of its potential returns per unit of risk. Round One is currently generating about -0.12 per unit of risk. If you would invest 1,702 in Mattel Inc on September 14, 2024 and sell it today you would earn a total of 181.00 from holding Mattel Inc or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.1% |
| Values | Daily Returns |
Mattel Inc vs. Round One
Performance |
| Timeline |
| Mattel Inc |
| Round One |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mattel and Round One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Round One
The main advantage of trading using opposite Mattel and Round One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Round One 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 Round One will offset losses from the drop in Round One's long position.| Mattel vs. Clarus Corp | Mattel vs. Johnson Outdoors | Mattel vs. JAKKS Pacific | Mattel vs. OneSpaWorld Holdings |
| Round One vs. Six Flags Entertainment | Round One vs. Johnson Outdoors | Round One vs. Acushnet Holdings Corp | Round One vs. Mattel Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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