Correlation Between PulteGroup and Mattel

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

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

Diversification Opportunities for PulteGroup and Mattel

-0.45

Correlation Coefficient

PulteGroup  Mattel

Very good diversification

The 3 months correlation between PulteGroup and Mattel is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PulteGroup and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and PulteGroup 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 PulteGroup 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 PulteGroup i.e., PulteGroup and Mattel go up and down completely randomly.

Pair Corralation between PulteGroup and Mattel

Considering the 90-day investment horizon PulteGroup is expected to generate 0.93 times more return on investment than Mattel. However, PulteGroup is 1.08 times less risky than Mattel. It trades about 0.17 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.05 per unit of risk. If you would invest  10,796  in PulteGroup on July 7, 2025 and sell it today you would earn a total of  2,965  from holding PulteGroup or generate 27.46% return on investment over 90 days.

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

PulteGroup  vs.  Mattel Inc

PulteGroup

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PulteGroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, PulteGroup displayed solid returns over the last few months and may actually be approaching a breakup point.

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PulteGroup and Mattel

The main advantage of trading using opposite PulteGroup and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PulteGroup 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 PulteGroup 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.