Correlation Between Mattel and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Mattel and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Ross Stores, you can compare the effects of market volatilities on Mattel and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Ross Stores.
Diversification Opportunities for Mattel and Ross Stores
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mattel and Ross is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Mattel i.e., Mattel and Ross Stores go up and down completely randomly.
Pair Corralation between Mattel and Ross Stores
Considering the 90-day investment horizon Mattel is expected to generate 3.2 times less return on investment than Ross Stores. In addition to that, Mattel is 1.51 times more volatile than Ross Stores. It trades about 0.02 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.08 per unit of volatility. If you would invest 13,182 in Ross Stores on September 3, 2024 and sell it today you would earn a total of 2,305 from holding Ross Stores or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. Ross Stores
Performance |
| Timeline |
| Mattel Inc |
| Ross Stores |
Mattel and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Ross Stores
The main advantage of trading using opposite Mattel and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Mattel vs. Funko Inc | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group | Mattel vs. Six Flags Entertainment |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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