Correlation Between Plby and Mattel
Can any of the company-specific risk be diversified away by investing in both Plby 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 Plby and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plby Group and Mattel Inc, you can compare the effects of market volatilities on Plby 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 Plby with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plby and Mattel.
Diversification Opportunities for Plby and Mattel
Average diversification
The 3 months correlation between Plby and Mattel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Plby Group and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Plby 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 Plby Group 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 Plby i.e., Plby and Mattel go up and down completely randomly.
Pair Corralation between Plby and Mattel
Given the investment horizon of 90 days Plby Group is expected to generate 3.31 times more return on investment than Mattel. However, Plby is 3.31 times more volatile than Mattel Inc. It trades about 0.08 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.01 per unit of risk. If you would invest 64.00 in Plby Group on September 2, 2024 and sell it today you would earn a total of 74.00 from holding Plby Group or generate 115.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plby Group vs. Mattel Inc
Performance |
| Timeline |
| Plby Group |
| Mattel Inc |
Plby and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plby and Mattel
The main advantage of trading using opposite Plby and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plby 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.| Plby vs. Purecycle Technologies Holdings | Plby vs. Dolphin Entertainment | Plby vs. Hall of Fame | Plby vs. Funko Inc |
| Mattel vs. LCI Industries | Mattel vs. MCBC Holdings | Mattel vs. Winnebago Industries | Mattel vs. Thor Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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