Correlation Between Funko and Kirklands

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

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

Diversification Opportunities for Funko and Kirklands

0.83

Correlation Coefficient

Funko  Kirklands

Very poor diversification

The 3 months correlation between Funko and Kirklands is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Kirklands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirklands 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 Kirklands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirklands has no effect on the direction of Funko i.e., Funko and Kirklands go up and down completely randomly.

Pair Corralation between Funko and Kirklands

Given the investment horizon of 90 days Funko Inc is expected to under-perform the Kirklands. In addition to that, Funko is 1.11 times more volatile than Kirklands. It trades about -0.3 of its total potential returns per unit of risk. Kirklands is currently generating about -0.12 per unit of volatility. If you would invest  165.00  in Kirklands on December 29, 2024 and sell it today you would lose (36.00) from holding Kirklands or give up 21.82% of portfolio value over 90 days.

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

Funko Inc  vs.  Kirklands

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.

Kirklands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kirklands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Funko and Kirklands

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

The idea behind Funko Inc and Kirklands 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.