Correlation Between Nikon Corp and Mattel
Can any of the company-specific risk be diversified away by investing in both Nikon Corp 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 Nikon Corp and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikon Corp and Mattel Inc, you can compare the effects of market volatilities on Nikon Corp 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 Nikon Corp with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikon Corp and Mattel.
Diversification Opportunities for Nikon Corp and Mattel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nikon and Mattel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nikon Corp and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Nikon Corp 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 Nikon Corp 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 Nikon Corp i.e., Nikon Corp and Mattel go up and down completely randomly.
Pair Corralation between Nikon Corp and Mattel
Assuming the 90 days horizon Nikon Corp is expected to generate 1.2 times more return on investment than Mattel. However, Nikon Corp is 1.2 times more volatile than Mattel Inc. It trades about 0.03 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.02 per unit of risk. If you would invest 897.00 in Nikon Corp on August 27, 2024 and sell it today you would earn a total of 254.00 from holding Nikon Corp or generate 28.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikon Corp vs. Mattel Inc
Performance |
| Timeline |
| Nikon Corp |
| Mattel Inc |
Nikon Corp and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikon Corp and Mattel
The main advantage of trading using opposite Nikon Corp and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikon Corp 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.| Nikon Corp vs. Yamaha Corp DRC | Nikon Corp vs. Planet Fitness | Nikon Corp vs. Plby Group | Nikon Corp vs. Shimano Inc ADR |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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