Correlation Between Omni Health and Mattel

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Can any of the company-specific risk be diversified away by investing in both Omni Health 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 Omni Health and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Health and Mattel Inc, you can compare the effects of market volatilities on Omni Health 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 Omni Health with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Health and Mattel.

Diversification Opportunities for Omni Health and Mattel

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Omni and Mattel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Omni Health and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Omni Health 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 Omni Health 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 Omni Health i.e., Omni Health and Mattel go up and down completely randomly.

Pair Corralation between Omni Health and Mattel

If you would invest  1,702  in Mattel Inc on September 14, 2024 and sell it today you would earn a total of  230.00  from holding Mattel Inc or generate 13.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Omni Health  vs.  Mattel Inc

 Performance 
       Timeline  
Omni Health 

Risk-Adjusted Performance

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Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Mattel Inc 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mattel is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Omni Health and Mattel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Omni Health and Mattel

The main advantage of trading using opposite Omni Health and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Health 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.
The idea behind Omni Health and Mattel Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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