Correlation Between Mattel and Radcom

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

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

Diversification Opportunities for Mattel and Radcom

-0.02

Correlation Coefficient

Mattel  Radcom

Good diversification

The 3 months correlation between Mattel and Radcom is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of Mattel i.e., Mattel and Radcom go up and down completely randomly.

Pair Corralation between Mattel and Radcom

Considering the 90-day investment horizon Mattel Inc is expected to under-perform the Radcom. But the stock apears to be less risky and, when comparing its historical volatility, Mattel Inc is 1.16 times less risky than Radcom. The stock trades about -0.02 of its potential returns per unit of risk. The Radcom is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,316  in Radcom on May 26, 2025 and sell it today you would earn a total of  42.00  from holding Radcom or generate 3.19% return on investment over 90 days.

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

Mattel Inc  vs.  Radcom

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.

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Radcom is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mattel and Radcom

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

The idea behind Mattel Inc and Radcom 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.