Correlation Between Funko and Auddia

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

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

Diversification Opportunities for Funko and Auddia

-0.09

Correlation Coefficient

Funko  Auddia

Good diversification

The 3 months correlation between Funko and Auddia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Auddia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auddia Inc 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 Auddia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auddia Inc has no effect on the direction of Funko i.e., Funko and Auddia go up and down completely randomly.

Pair Corralation between Funko and Auddia

Given the investment horizon of 90 days Funko is expected to generate 54.63 times less return on investment than Auddia. But when comparing it to its historical volatility, Funko Inc is 55.93 times less risky than Auddia. It trades about 0.17 of its potential returns per unit of risk. Auddia Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  8.45  in Auddia Inc on October 8, 2024 and sell it today you would lose (6.34) from holding Auddia Inc or give up 75.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.04%
Values	Daily Returns

Funko Inc  vs.  Auddia Inc

Funko Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Funko displayed solid returns over the last few months and may actually be approaching a breakup point.

Auddia Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Funko and Auddia

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

The idea behind Funko Inc and Auddia 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.

Check out your portfolio center.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.