Correlation Between Installed Building and Mattel

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

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

Diversification Opportunities for Installed Building and Mattel

0.57

Correlation Coefficient

Installed Building  Mattel

Very weak diversification

The 3 months correlation between Installed and Mattel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Installed Building Products and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and Installed Building 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 Installed Building Products 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 Installed Building i.e., Installed Building and Mattel go up and down completely randomly.

Pair Corralation between Installed Building and Mattel

Considering the 90-day investment horizon Installed Building Products is expected to generate 1.74 times more return on investment than Mattel. However, Installed Building is 1.74 times more volatile than Mattel Inc. It trades about 0.14 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.05 per unit of risk. If you would invest  20,567  in Installed Building Products on July 28, 2025 and sell it today you would earn a total of  6,252  from holding Installed Building Products or generate 30.4% return on investment over 90 days.

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

Installed Building Products  vs.  Mattel Inc

Installed Building

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Installed Building Products are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Installed Building reported solid returns over the last few months and may actually be approaching a breakup point.

Mattel Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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 Installed Building and Mattel

The main advantage of trading using opposite Installed Building and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Installed Building 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 Installed Building Products 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..