Correlation Between Mattel and Madison Square

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

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

Diversification Opportunities for Mattel and Madison Square

0.69

Correlation Coefficient

Mattel  Madison Square

Poor diversification

The 3 months correlation between Mattel and Madison is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden 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 Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Mattel i.e., Mattel and Madison Square go up and down completely randomly.

Pair Corralation between Mattel and Madison Square

Considering the 90-day investment horizon Mattel is expected to generate 2.19 times less return on investment than Madison Square. In addition to that, Mattel is 1.2 times more volatile than Madison Square Garden. It trades about 0.03 of its total potential returns per unit of risk. Madison Square Garden is currently generating about 0.08 per unit of volatility. If you would invest  3,559  in Madison Square Garden on September 6, 2025 and sell it today you would earn a total of  1,593  from holding Madison Square Garden or generate 44.76% return on investment over 90 days.

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

Mattel Inc  vs.  Madison Square Garden

Mattel Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mattel Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Mattel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Madison Square Garden

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Madison Square Garden are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Madison Square exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mattel and Madison Square

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

The idea behind Mattel Inc and Madison Square Garden 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.