Correlation Between Funko and Sportsmans

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

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

Diversification Opportunities for Funko and Sportsmans

0.83

Correlation Coefficient

Funko  Sportsmans

Very poor diversification

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

Pair Corralation between Funko and Sportsmans

Given the investment horizon of 90 days Funko Inc is expected to generate 0.8 times more return on investment than Sportsmans. However, Funko Inc is 1.25 times less risky than Sportsmans. It trades about -0.32 of its potential returns per unit of risk. Sportsmans is currently generating about -0.35 per unit of risk. If you would invest  1,365  in Funko Inc on December 30, 2024 and sell it today you would lose (700.00) from holding Funko Inc or give up 51.28% 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.  Sportsmans

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.

Sportsmans

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sportsmans has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Funko and Sportsmans

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

The idea behind Funko Inc and Sportsmans 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.