Correlation Between Callaway Golf and Mattel
Can any of the company-specific risk be diversified away by investing in both Callaway Golf and Mattel 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 Callaway Golf and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callaway Golf and Mattel Inc, you can compare the effects of market volatilities on Callaway Golf and Mattel 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 Callaway Golf with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callaway Golf and Mattel.
Diversification Opportunities for Callaway Golf and Mattel
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Callaway and Mattel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Callaway Golf and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Callaway Golf 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 Callaway Golf are associated (or correlated) with Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Callaway Golf i.e., Callaway Golf and Mattel go up and down completely randomly.
Pair Corralation between Callaway Golf and Mattel
Given the investment horizon of 90 days Callaway Golf is expected to under-perform the Mattel. In addition to that, Callaway Golf is 1.34 times more volatile than Mattel Inc. It trades about -0.06 of its total potential returns per unit of risk. Mattel Inc is currently generating about 0.04 per unit of volatility. If you would invest 1,788 in Mattel Inc on November 9, 2024 and sell it today you would earn a total of 355.00 from holding Mattel Inc or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Callaway Golf vs. Mattel Inc
Performance |
| Timeline |
| Callaway Golf |
| Mattel Inc |
Callaway Golf and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callaway Golf and Mattel
The main advantage of trading using opposite Callaway Golf and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callaway Golf position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel's long position.| Callaway Golf vs. Johnson Outdoors | Callaway Golf vs. YETI Holdings | Callaway Golf vs. Xponential Fitness | Callaway Golf vs. Acushnet Holdings Corp |
| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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