Correlation Between Funko and MDB Capital

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

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

Diversification Opportunities for Funko and MDB Capital

-0.18

Correlation Coefficient

Funko  MDB Capital

Good diversification

The 3 months correlation between Funko and MDB is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and MDB Capital Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDB Capital Holdings, 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 MDB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDB Capital Holdings, has no effect on the direction of Funko i.e., Funko and MDB Capital go up and down completely randomly.

Pair Corralation between Funko and MDB Capital

Given the investment horizon of 90 days Funko Inc is expected to generate 1.1 times more return on investment than MDB Capital. However, Funko is 1.1 times more volatile than MDB Capital Holdings,. It trades about 0.41 of its potential returns per unit of risk. MDB Capital Holdings, is currently generating about 0.06 per unit of risk. If you would invest  1,150  in Funko Inc on October 11, 2024 and sell it today you would earn a total of  300.00  from holding Funko Inc or generate 26.09% return on investment over 90 days.

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

Funko Inc  vs.  MDB Capital Holdings,

Funko Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 8 (%) 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.

MDB Capital Holdings,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MDB Capital Holdings, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, MDB Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Funko and MDB Capital

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

The idea behind Funko Inc and MDB Capital Holdings, 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.