Correlation Between Dolphin Entertainment and Funko

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

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

Diversification Opportunities for Dolphin Entertainment and Funko

0.19

Correlation Coefficient

Dolphin Entertainment  Funko

Average diversification

The 3 months correlation between Dolphin and Funko is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Dolphin Entertainment 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 Dolphin Entertainment are associated (or correlated) with Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Funko go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Funko

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 1.4 times more return on investment than Funko. However, Dolphin Entertainment is 1.4 times more volatile than Funko Inc. It trades about 0.03 of its potential returns per unit of risk. Funko Inc is currently generating about -0.3 per unit of risk. If you would invest  104.00  in Dolphin Entertainment on December 28, 2024 and sell it today you would earn a total of  2.00  from holding Dolphin Entertainment or generate 1.92% return on investment over 90 days.

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

Dolphin Entertainment  vs.  Funko Inc

Dolphin Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dolphin Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Dolphin Entertainment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Funko Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Funko Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dolphin Entertainment and Funko

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

The idea behind Dolphin Entertainment and Funko 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 Anywhere module to track or share privately all of your investments from the convenience of any device.