Correlation Between Shimano and Mattel
Can any of the company-specific risk be diversified away by investing in both Shimano 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 Shimano and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano Inc ADR and Mattel Inc, you can compare the effects of market volatilities on Shimano 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 Shimano with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Mattel.
Diversification Opportunities for Shimano and Mattel
Significant diversification
The 3 months correlation between Shimano and Mattel is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Shimano 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 Shimano Inc ADR 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 Shimano i.e., Shimano and Mattel go up and down completely randomly.
Pair Corralation between Shimano and Mattel
Assuming the 90 days horizon Shimano Inc ADR is expected to generate 0.8 times more return on investment than Mattel. However, Shimano Inc ADR is 1.26 times less risky than Mattel. It trades about 0.01 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.0 per unit of risk. If you would invest 1,385 in Shimano Inc ADR on August 27, 2024 and sell it today you would lose (7.00) from holding Shimano Inc ADR or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimano Inc ADR vs. Mattel Inc
Performance |
| Timeline |
| Shimano Inc ADR |
| Mattel Inc |
Shimano and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Mattel
The main advantage of trading using opposite Shimano and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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.| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
| Mattel vs. MCBC Holdings | Mattel vs. Winnebago Industries | Mattel vs. LCI 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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