Correlation Between JAKKS Pacific and Funko

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

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

Diversification Opportunities for JAKKS Pacific and Funko

0.68

Correlation Coefficient

JAKKS Pacific  Funko

Poor diversification

The 3 months correlation between JAKKS and Funko is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JAKKS Pacific and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and JAKKS Pacific 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 JAKKS Pacific are associated (or correlated) with Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of JAKKS Pacific i.e., JAKKS Pacific and Funko go up and down completely randomly.

Pair Corralation between JAKKS Pacific and Funko

Given the investment horizon of 90 days JAKKS Pacific is expected to generate 0.86 times more return on investment than Funko. However, JAKKS Pacific is 1.17 times less risky than Funko. It trades about -0.03 of its potential returns per unit of risk. Funko Inc is currently generating about -0.3 per unit of risk. If you would invest  2,690  in JAKKS Pacific on December 28, 2024 and sell it today you would lose (226.00) from holding JAKKS Pacific or give up 8.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

JAKKS Pacific  vs.  Funko Inc

JAKKS Pacific

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAKKS Pacific has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with JAKKS Pacific and Funko

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

The idea behind JAKKS Pacific and Funko Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.