Correlation Between Mattel and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both Mattel and Tamarack Valley 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 Tamarack Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Tamarack Valley Energy, you can compare the effects of market volatilities on Mattel and Tamarack Valley 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 Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Tamarack Valley.
Diversification Opportunities for Mattel and Tamarack Valley
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mattel and Tamarack is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of Mattel i.e., Mattel and Tamarack Valley go up and down completely randomly.
Pair Corralation between Mattel and Tamarack Valley
Considering the 90-day investment horizon Mattel is expected to generate 6.98 times less return on investment than Tamarack Valley. But when comparing it to its historical volatility, Mattel Inc is 1.57 times less risky than Tamarack Valley. It trades about 0.04 of its potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Tamarack Valley Energy on October 24, 2024 and sell it today you would earn a total of 15.00 from holding Tamarack Valley Energy or generate 4.84% 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. Tamarack Valley Energy
Performance |
| Timeline |
| Mattel Inc |
| Tamarack Valley Energy |
Mattel and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Tamarack Valley
The main advantage of trading using opposite Mattel and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley's long position.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| Tamarack Valley vs. Ingredion Incorporated | Tamarack Valley vs. Fernhill Beverage | Tamarack Valley vs. Mattel Inc | Tamarack Valley vs. National Beverage Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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