Correlation Between Mills Music and Funko

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

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

Diversification Opportunities for Mills Music and Funko

0.63

Correlation Coefficient

Mills Music  Funko

Poor diversification

The 3 months correlation between Mills and Funko is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mills Music Trust and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Mills Music 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 Mills Music Trust 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 Mills Music i.e., Mills Music and Funko go up and down completely randomly.

Pair Corralation between Mills Music and Funko

Assuming the 90 days horizon Mills Music Trust is expected to generate 0.55 times more return on investment than Funko. However, Mills Music Trust is 1.81 times less risky than Funko. It trades about -0.14 of its potential returns per unit of risk. Funko Inc is currently generating about -0.3 per unit of risk. If you would invest  3,600  in Mills Music Trust on December 28, 2024 and sell it today you would lose (555.00) from holding Mills Music Trust or give up 15.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mills Music Trust  vs.  Funko Inc

Mills Music Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mills Music Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 Mills Music and Funko

The main advantage of trading using opposite Mills Music and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mills Music 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 Mills Music Trust 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.