Correlation Between Funko and SunOpta

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

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

Diversification Opportunities for Funko and SunOpta

-0.33

Correlation Coefficient

Funko  SunOpta

Very good diversification

The 3 months correlation between Funko and SunOpta is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Funko i.e., Funko and SunOpta go up and down completely randomly.

Pair Corralation between Funko and SunOpta

Given the investment horizon of 90 days Funko Inc is expected to generate 1.62 times more return on investment than SunOpta. However, Funko is 1.62 times more volatile than SunOpta. It trades about 0.23 of its potential returns per unit of risk. SunOpta is currently generating about 0.03 per unit of risk. If you would invest  1,175  in Funko Inc on September 29, 2024 and sell it today you would earn a total of  149.00  from holding Funko Inc or generate 12.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Funko Inc  vs.  SunOpta

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.

SunOpta

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Funko and SunOpta

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

The idea behind Funko Inc and SunOpta 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.