Correlation Between Assurant and Mattel

Can any of the company-specific risk be diversified away by investing in both Assurant 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 Assurant and Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assurant and Mattel Inc, you can compare the effects of market volatilities on Assurant 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 Assurant with a short position of Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Mattel.

Diversification Opportunities for Assurant and Mattel

-0.29

Correlation Coefficient

Assurant  Mattel

Very good diversification

The 3 months correlation between Assurant and Mattel is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Assurant 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 Assurant 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 Assurant i.e., Assurant and Mattel go up and down completely randomly.

Pair Corralation between Assurant and Mattel

Considering the 90-day investment horizon Assurant is expected to generate 0.56 times more return on investment than Mattel. However, Assurant is 1.8 times less risky than Mattel. It trades about 0.16 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.04 per unit of risk. If you would invest  16,465  in Assurant on September 30, 2024 and sell it today you would earn a total of  5,040  from holding Assurant or generate 30.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Assurant  vs.  Mattel Inc

Assurant

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Assurant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mattel Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mattel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mattel is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Assurant and Mattel

The main advantage of trading using opposite Assurant and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant 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 Assurant 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.