Correlation Between Funko and Plby

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

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

Diversification Opportunities for Funko and Plby

0.47

Correlation Coefficient

Funko  Plby

Very weak diversification

The 3 months correlation between Funko and Plby is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Plby Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plby Group 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 Plby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plby Group has no effect on the direction of Funko i.e., Funko and Plby go up and down completely randomly.

Pair Corralation between Funko and Plby

Given the investment horizon of 90 days Funko Inc is expected to generate 0.55 times more return on investment than Plby. However, Funko Inc is 1.82 times less risky than Plby. It trades about -0.33 of its potential returns per unit of risk. Plby Group is currently generating about -0.28 per unit of risk. If you would invest  1,362  in Funko Inc on December 4, 2024 and sell it today you would lose (196.00) from holding Funko Inc or give up 14.39% of portfolio value over 90 days.

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

Funko Inc  vs.  Plby Group

Funko Inc

Risk-Adjusted Performance

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 very healthy forward-looking signals, Funko is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Plby Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Plby Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Plby may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Funko and Plby

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

The idea behind Funko Inc and Plby Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.