Correlation Between Funko and ANTA Sports

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

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

Diversification Opportunities for Funko and ANTA Sports

0.35

Correlation Coefficient

Funko  ANTA Sports

Weak diversification

The 3 months correlation between Funko and ANTA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Funko i.e., Funko and ANTA Sports go up and down completely randomly.

Pair Corralation between Funko and ANTA Sports

Given the investment horizon of 90 days Funko Inc is expected to generate 0.82 times more return on investment than ANTA Sports. However, Funko Inc is 1.23 times less risky than ANTA Sports. It trades about 0.06 of its potential returns per unit of risk. ANTA Sports Products is currently generating about -0.05 per unit of risk. If you would invest  1,222  in Funko Inc on September 29, 2024 and sell it today you would earn a total of  102.00  from holding Funko Inc or generate 8.35% return on investment over 90 days.

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

Funko Inc  vs.  ANTA Sports Products

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.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Funko and ANTA Sports

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

The idea behind Funko Inc and ANTA Sports Products 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.