Correlation Between Funko and CONSOLIDATED

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

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

Diversification Opportunities for Funko and CONSOLIDATED

0.06

Correlation Coefficient

Funko  CONSOLIDATED

Significant diversification

The 3 months correlation between Funko and CONSOLIDATED is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Funko i.e., Funko and CONSOLIDATED go up and down completely randomly.

Pair Corralation between Funko and CONSOLIDATED

Given the investment horizon of 90 days Funko Inc is expected to generate 1.13 times more return on investment than CONSOLIDATED. However, Funko is 1.13 times more volatile than CONSOLIDATED EDISON N. It trades about 0.28 of its potential returns per unit of risk. CONSOLIDATED EDISON N is currently generating about 0.0 per unit of risk. If you would invest  1,036  in Funko Inc on September 15, 2024 and sell it today you would earn a total of  135.00  from holding Funko Inc or generate 13.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.38%
Values	Daily Returns

Funko Inc  vs.  CONSOLIDATED EDISON N

Funko Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Funko may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CONSOLIDATED EDISON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSOLIDATED EDISON N has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CONSOLIDATED EDISON N investors.

Pair Trading with Funko and CONSOLIDATED

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

The idea behind Funko Inc and CONSOLIDATED EDISON N 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.