Correlation Between Funko and Bonesupport Holding

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

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

Diversification Opportunities for Funko and Bonesupport Holding

-0.17

Correlation Coefficient

Funko  Bonesupport Holding

Good diversification

The 3 months correlation between Funko and Bonesupport is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Bonesupport Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonesupport Holding 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 Bonesupport Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonesupport Holding has no effect on the direction of Funko i.e., Funko and Bonesupport Holding go up and down completely randomly.

Pair Corralation between Funko and Bonesupport Holding

Given the investment horizon of 90 days Funko Inc is expected to generate 1.06 times more return on investment than Bonesupport Holding. However, Funko is 1.06 times more volatile than Bonesupport Holding AB. It trades about 0.04 of its potential returns per unit of risk. Bonesupport Holding AB is currently generating about 0.03 per unit of risk. If you would invest  1,199  in Funko Inc on September 21, 2024 and sell it today you would earn a total of  49.00  from holding Funko Inc or generate 4.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Funko Inc  vs.  Bonesupport Holding AB

Funko Inc

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, Funko is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bonesupport Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bonesupport Holding AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bonesupport Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Funko and Bonesupport Holding

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

The idea behind Funko Inc and Bonesupport Holding AB 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.