Correlation Between Mattel and Helport AI

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

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

Diversification Opportunities for Mattel and Helport AI

-0.1

Correlation Coefficient

Mattel  Helport AI

Good diversification

The 3 months correlation between Mattel and Helport is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Helport AI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helport AI Limited and Mattel 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 Mattel Inc are associated (or correlated) with Helport AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helport AI Limited has no effect on the direction of Mattel i.e., Mattel and Helport AI go up and down completely randomly.

Pair Corralation between Mattel and Helport AI

Considering the 90-day investment horizon Mattel Inc is expected to under-perform the Helport AI. But the stock apears to be less risky and, when comparing its historical volatility, Mattel Inc is 3.83 times less risky than Helport AI. The stock trades about -0.04 of its potential returns per unit of risk. The Helport AI Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  491.00  in Helport AI Limited on September 28, 2024 and sell it today you would earn a total of  111.00  from holding Helport AI Limited or generate 22.61% return on investment over 90 days.

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

Mattel Inc  vs.  Helport AI Limited

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.

Helport AI Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helport AI Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Helport AI demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mattel and Helport AI

The main advantage of trading using opposite Mattel and Helport AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel position performs unexpectedly, Helport AI 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 Helport AI will offset losses from the drop in Helport AI's long position.

The idea behind Mattel Inc and Helport AI Limited 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.