Correlation Between Palomar Holdings and Mattel
Can any of the company-specific risk be diversified away by investing in both Palomar Holdings 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 Palomar Holdings and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palomar Holdings and Mattel Inc, you can compare the effects of market volatilities on Palomar Holdings 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 Palomar Holdings with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palomar Holdings and Mattel.
Diversification Opportunities for Palomar Holdings and Mattel
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palomar and Mattel is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Palomar Holdings 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 Palomar Holdings 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 Palomar Holdings i.e., Palomar Holdings and Mattel go up and down completely randomly.
Pair Corralation between Palomar Holdings and Mattel
Given the investment horizon of 90 days Palomar Holdings is expected to generate 1.06 times more return on investment than Mattel. However, Palomar Holdings is 1.06 times more volatile than Mattel Inc. It trades about 0.2 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.06 per unit of risk. If you would invest 10,069 in Palomar Holdings on September 13, 2024 and sell it today you would earn a total of 776.00 from holding Palomar Holdings or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palomar Holdings vs. Mattel Inc
Performance |
| Timeline |
| Palomar Holdings |
| Mattel Inc |
Palomar Holdings and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palomar Holdings and Mattel
The main advantage of trading using opposite Palomar Holdings and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palomar Holdings 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.| Palomar Holdings vs. Progressive Corp | Palomar Holdings vs. Chubb | Palomar Holdings vs. Cincinnati Financial | Palomar Holdings vs. W R Berkley |
| Mattel vs. Clarus Corp | Mattel vs. Escalade Incorporated | Mattel vs. Johnson Outdoors | Mattel vs. JAKKS Pacific |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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