Correlation Between Funko and STRYKER

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

By analyzing existing cross correlation between Funko Inc and STRYKER P 365, you can compare the effects of market volatilities on Funko and STRYKER 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 STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and STRYKER.

Diversification Opportunities for Funko and STRYKER

-0.09

Correlation Coefficient

Funko  STRYKER

Good diversification

The 3 months correlation between Funko and STRYKER is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and STRYKER P 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 365 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 STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 365 has no effect on the direction of Funko i.e., Funko and STRYKER go up and down completely randomly.

Pair Corralation between Funko and STRYKER

Given the investment horizon of 90 days Funko Inc is expected to generate 7.89 times more return on investment than STRYKER. However, Funko is 7.89 times more volatile than STRYKER P 365. It trades about 0.03 of its potential returns per unit of risk. STRYKER P 365 is currently generating about 0.0 per unit of risk. If you would invest  1,131  in Funko Inc on September 29, 2024 and sell it today you would earn a total of  193.00  from holding Funko Inc or generate 17.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.35%
Values	Daily Returns

Funko Inc  vs.  STRYKER P 365

Funko Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 4 (%) 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.

STRYKER P 365

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STRYKER P 365 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STRYKER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Funko and STRYKER

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

The idea behind Funko Inc and STRYKER P 365 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.