Correlation Between VF and Mattel

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

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

Diversification Opportunities for VF and Mattel

0.1

Correlation Coefficient

VF  Mattel

Average diversification

The 3 months correlation between VF and Mattel is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc and VF 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 VF Corporation 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 VF i.e., VF and Mattel go up and down completely randomly.

Pair Corralation between VF and Mattel

Considering the 90-day investment horizon VF Corporation is expected to generate 1.54 times more return on investment than Mattel. However, VF is 1.54 times more volatile than Mattel Inc. It trades about -0.02 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.04 per unit of risk. If you would invest  1,422  in VF Corporation on May 17, 2025 and sell it today you would lose (126.00) from holding VF Corporation or give up 8.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

VF Corp.  vs.  Mattel Inc

VF Corporation

Risk-Adjusted Performance

Weakest

Over the last 90 days VF Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, VF is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain 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 VF and Mattel

The main advantage of trading using opposite VF and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF 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 VF Corporation 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 Transaction History module to view history of all your transactions and understand their impact on performance.