Correlation Between Funko and Yuexiu Transport

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

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

Diversification Opportunities for Funko and Yuexiu Transport

-0.59

Correlation Coefficient

Funko  Yuexiu Transport

Excellent diversification

The 3 months correlation between Funko and Yuexiu is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Funko i.e., Funko and Yuexiu Transport go up and down completely randomly.

Pair Corralation between Funko and Yuexiu Transport

Given the investment horizon of 90 days Funko is expected to generate 5.5 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Funko Inc is 1.3 times less risky than Yuexiu Transport. It trades about 0.03 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Yuexiu Transport Infrastructure on September 17, 2024 and sell it today you would earn a total of  13.00  from holding Yuexiu Transport Infrastructure or generate 28.89% return on investment over 90 days.

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

Funko Inc  vs.  Yuexiu Transport Infrastructur

Funko Inc

Risk-Adjusted Performance

2 of 100

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.

Yuexiu Transport Inf

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yuexiu Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Funko and Yuexiu Transport

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

The idea behind Funko Inc and Yuexiu Transport Infrastructure 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.