Correlation Between Funko and Forsys Metals

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

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

Diversification Opportunities for Funko and Forsys Metals

0.15

Correlation Coefficient

Funko  Forsys Metals

Average diversification

The 3 months correlation between Funko and Forsys is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Funko i.e., Funko and Forsys Metals go up and down completely randomly.

Pair Corralation between Funko and Forsys Metals

Given the investment horizon of 90 days Funko Inc is expected to generate 0.65 times more return on investment than Forsys Metals. However, Funko Inc is 1.55 times less risky than Forsys Metals. It trades about 0.06 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about -0.1 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Funko Inc  vs.  Forsys Metals 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.

Forsys Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Funko and Forsys Metals

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

The idea behind Funko Inc and Forsys Metals 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.