Correlation Between Funko and Vista Outdoor

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

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

Diversification Opportunities for Funko and Vista Outdoor

0.16

Correlation Coefficient

Funko  Vista Outdoor

Average diversification

The 3 months correlation between Funko and Vista is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor 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 Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Funko i.e., Funko and Vista Outdoor go up and down completely randomly.

Pair Corralation between Funko and Vista Outdoor

Given the investment horizon of 90 days Funko Inc is expected to generate 1.97 times more return on investment than Vista Outdoor. However, Funko is 1.97 times more volatile than Vista Outdoor. It trades about 0.08 of its potential returns per unit of risk. Vista Outdoor is currently generating about 0.15 per unit of risk. If you would invest  1,033  in Funko Inc on September 3, 2024 and sell it today you would earn a total of  142.00  from holding Funko Inc or generate 13.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Funko Inc  vs.  Vista Outdoor

Funko Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Funko Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Funko displayed solid returns over the last few months and may actually be approaching a breakup point.

Vista Outdoor

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Outdoor are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Vista Outdoor displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Funko and Vista Outdoor

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

The idea behind Funko Inc and Vista Outdoor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.