Correlation Between Funko and CleanGo Innovations

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

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

Diversification Opportunities for Funko and CleanGo Innovations

0.52

Correlation Coefficient

Funko  CleanGo Innovations

Very weak diversification

The 3 months correlation between Funko and CleanGo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations 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 CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Funko i.e., Funko and CleanGo Innovations go up and down completely randomly.

Pair Corralation between Funko and CleanGo Innovations

Given the investment horizon of 90 days Funko Inc is expected to generate 0.29 times more return on investment than CleanGo Innovations. However, Funko Inc is 3.51 times less risky than CleanGo Innovations. It trades about 0.11 of its potential returns per unit of risk. CleanGo Innovations is currently generating about 0.03 per unit of risk. If you would invest  682.00  in Funko Inc on October 9, 2024 and sell it today you would earn a total of  702.00  from holding Funko Inc or generate 102.93% return on investment over 90 days.

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

Funko Inc  vs.  CleanGo Innovations

Funko Inc

Risk-Adjusted Performance

6 of 100

OK

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.

CleanGo Innovations

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CleanGo Innovations are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CleanGo Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Funko and CleanGo Innovations

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

The idea behind Funko Inc and CleanGo Innovations 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.