Correlation Between Funko and Aerofoam Metals

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

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

Diversification Opportunities for Funko and Aerofoam Metals

0.0

Correlation Coefficient

Funko  Aerofoam Metals

Pay attention - limited upside

The 3 months correlation between Funko and Aerofoam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Aerofoam Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerofoam Metals and Funko 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 Funko Inc are associated (or correlated) with Aerofoam Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerofoam Metals has no effect on the direction of Funko i.e., Funko and Aerofoam Metals go up and down completely randomly.

Pair Corralation between Funko and Aerofoam Metals

If you would invest  1,222  in Funko Inc on September 29, 2024 and sell it today you would earn a total of  102.00  from holding Funko Inc or generate 8.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Funko Inc  vs.  Aerofoam Metals

Funko Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Funko may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aerofoam Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aerofoam Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aerofoam Metals is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Funko and Aerofoam Metals

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

The idea behind Funko Inc and Aerofoam Metals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.