Correlation Between GoPro and Mattel

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

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

Diversification Opportunities for GoPro and Mattel

0.49

Correlation Coefficient

GoPro  Mattel

Very weak diversification

The 3 months correlation between GoPro and Mattel is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and GoPro 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 GoPro Inc 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 GoPro i.e., GoPro and Mattel go up and down completely randomly.

Pair Corralation between GoPro and Mattel

Given the investment horizon of 90 days GoPro Inc is expected to generate 3.49 times more return on investment than Mattel. However, GoPro is 3.49 times more volatile than Mattel Inc. It trades about 0.23 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.2 per unit of risk. If you would invest  63.00  in GoPro Inc on April 25, 2025 and sell it today you would earn a total of  91.00  from holding GoPro Inc or generate 144.44% return on investment over 90 days.

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

GoPro Inc  vs.  Mattel Inc

GoPro Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GoPro Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GoPro displayed solid returns over the last few months and may actually be approaching a breakup point.

Mattel Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mattel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GoPro and Mattel

The main advantage of trading using opposite GoPro and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro 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 GoPro Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.