Correlation Between JD and Funko

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

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

Diversification Opportunities for JD and Funko

-0.53

Correlation Coefficient

JD  Funko

Excellent diversification

The 3 months correlation between JD and Funko is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JD Inc Adr and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and JD 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 JD Inc Adr 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 JD i.e., JD and Funko go up and down completely randomly.

Pair Corralation between JD and Funko

Allowing for the 90-day total investment horizon JD Inc Adr is expected to generate 1.0 times more return on investment than Funko. However, JD is 1.0 times more volatile than Funko Inc. It trades about 0.08 of its potential returns per unit of risk. Funko Inc is currently generating about -0.26 per unit of risk. If you would invest  3,613  in JD Inc Adr on December 26, 2024 and sell it today you would earn a total of  534.00  from holding JD Inc Adr or generate 14.78% return on investment over 90 days.

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

JD Inc Adr  vs.  Funko Inc

JD Inc Adr

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc Adr are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, JD exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 JD and Funko

The main advantage of trading using opposite JD and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD 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 JD Inc Adr 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.