Correlation Between Mattel and Nabors Energy

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

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

Diversification Opportunities for Mattel and Nabors Energy

-0.62

Correlation Coefficient

Mattel  Nabors Energy

Excellent diversification

The 3 months correlation between Mattel and Nabors is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Nabors Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Energy Transition 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 Nabors Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Energy Transition has no effect on the direction of Mattel i.e., Mattel and Nabors Energy go up and down completely randomly.

Pair Corralation between Mattel and Nabors Energy

Considering the 90-day investment horizon Mattel Inc is expected to under-perform the Nabors Energy. In addition to that, Mattel is 7.27 times more volatile than Nabors Energy Transition. It trades about -0.02 of its total potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.07 per unit of volatility. If you would invest  1,107  in Nabors Energy Transition on May 26, 2025 and sell it today you would earn a total of  16.00  from holding Nabors Energy Transition or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Mattel Inc  vs.  Nabors Energy Transition

Mattel Inc

Risk-Adjusted Performance

Weakest

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Nabors Energy Transition

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Nabors Energy is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mattel and Nabors Energy

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

The idea behind Mattel Inc and Nabors Energy Transition 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.