Correlation Between Genuine Parts and Mattel

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

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

Diversification Opportunities for Genuine Parts and Mattel

0.14

Correlation Coefficient

Genuine Parts  Mattel

Average diversification

The 3 months correlation between Genuine and Mattel is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Genuine Parts 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 Genuine Parts Co 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 Genuine Parts i.e., Genuine Parts and Mattel go up and down completely randomly.

Pair Corralation between Genuine Parts and Mattel

Considering the 90-day investment horizon Genuine Parts is expected to generate 12.44 times less return on investment than Mattel. But when comparing it to its historical volatility, Genuine Parts Co is 1.49 times less risky than Mattel. It trades about 0.01 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,743  in Mattel Inc on July 25, 2025 and sell it today you would earn a total of  175.00  from holding Mattel Inc or generate 10.04% return on investment over 90 days.

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

Genuine Parts Co  vs.  Mattel Inc

Genuine Parts

Risk-Adjusted Performance

Weakest

Over the last 90 days Genuine Parts Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Genuine Parts is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mattel Inc

Risk-Adjusted Performance

Fair

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

Pair Trading with Genuine Parts and Mattel

The main advantage of trading using opposite Genuine Parts and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts 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 Genuine Parts Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..