Correlation Between Vista Outdoor and Mattel
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor 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 Vista Outdoor and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Mattel Inc, you can compare the effects of market volatilities on Vista Outdoor 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 Vista Outdoor with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Mattel.
Diversification Opportunities for Vista Outdoor and Mattel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Mattel is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor i.e., Vista Outdoor and Mattel go up and down completely randomly.
Pair Corralation between Vista Outdoor and Mattel
Given the investment horizon of 90 days Vista Outdoor is expected to generate 1.2 times more return on investment than Mattel. However, Vista Outdoor is 1.2 times more volatile than Mattel Inc. It trades about 0.05 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.01 per unit of risk. If you would invest 2,987 in Vista Outdoor on October 23, 2024 and sell it today you would earn a total of 1,476 from holding Vista Outdoor or generate 49.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.12% |
| Values | Daily Returns |
Vista Outdoor vs. Mattel Inc
Performance |
| Timeline |
| Vista Outdoor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Mattel Inc |
Vista Outdoor and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Outdoor and Mattel
The main advantage of trading using opposite Vista Outdoor and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor 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.| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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