Correlation Between Funko and Barrick Gold

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

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

Diversification Opportunities for Funko and Barrick Gold

0.5

Correlation Coefficient

Funko  Barrick Gold

Very weak diversification

The 3 months correlation between Funko and Barrick is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Funko i.e., Funko and Barrick Gold go up and down completely randomly.

Pair Corralation between Funko and Barrick Gold

Given the investment horizon of 90 days Funko Inc is expected to generate 1.65 times more return on investment than Barrick Gold. However, Funko is 1.65 times more volatile than Barrick Gold Corp. It trades about 0.08 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.09 per unit of risk. If you would invest  1,033  in Funko Inc on September 3, 2024 and sell it today you would earn a total of  142.00  from holding Funko Inc or generate 13.75% 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.  Barrick Gold Corp

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.

Barrick Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Funko and Barrick Gold

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

The idea behind Funko Inc and Barrick Gold Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.