Correlation Between Funko and Eldorado Gold

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

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

Diversification Opportunities for Funko and Eldorado Gold

0.27

Correlation Coefficient

Funko  Eldorado Gold

Modest diversification

The 3 months correlation between Funko and Eldorado is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Funko i.e., Funko and Eldorado Gold go up and down completely randomly.

Pair Corralation between Funko and Eldorado Gold

Given the investment horizon of 90 days Funko Inc is expected to generate 1.16 times more return on investment than Eldorado Gold. However, Funko is 1.16 times more volatile than Eldorado Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.08 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.  Eldorado Gold Corp

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.

Eldorado Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldorado Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Funko and Eldorado Gold

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

The idea behind Funko Inc and Eldorado Gold Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.