Correlation Between Mattel and OFAL

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

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

Diversification Opportunities for Mattel and OFAL

0.24

Correlation Coefficient

Mattel  OFAL

Modest diversification

The 3 months correlation between Mattel and OFAL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and OFAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFAL 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 OFAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFAL has no effect on the direction of Mattel i.e., Mattel and OFAL go up and down completely randomly.

Pair Corralation between Mattel and OFAL

Considering the 90-day investment horizon Mattel Inc is expected to generate 0.2 times more return on investment than OFAL. However, Mattel Inc is 5.04 times less risky than OFAL. It trades about -0.02 of its potential returns per unit of risk. OFAL is currently generating about -0.08 per unit of risk. If you would invest  1,949  in Mattel Inc on May 26, 2025 and sell it today you would lose (113.00) from holding Mattel Inc or give up 5.8% of portfolio value over 90 days.

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

Mattel Inc  vs.  OFAL

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.

OFAL

Risk-Adjusted Performance

Weakest

Over the last 90 days OFAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mattel and OFAL

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

The idea behind Mattel Inc and OFAL 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.