Correlation Between Funko and ZenaTech

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

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

Diversification Opportunities for Funko and ZenaTech

0.2

Correlation Coefficient

Funko  ZenaTech

Modest diversification

The 3 months correlation between Funko and ZenaTech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech 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 ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of Funko i.e., Funko and ZenaTech go up and down completely randomly.

Pair Corralation between Funko and ZenaTech

Given the investment horizon of 90 days Funko is expected to generate 38.64 times less return on investment than ZenaTech. But when comparing it to its historical volatility, Funko Inc is 14.99 times less risky than ZenaTech. It trades about 0.03 of its potential returns per unit of risk. ZenaTech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  880.00  in ZenaTech on September 17, 2024 and sell it today you would lose (183.00) from holding ZenaTech or give up 20.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.62%
Values	Daily Returns

Funko Inc  vs.  ZenaTech

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.

ZenaTech

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZenaTech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, ZenaTech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Funko and ZenaTech

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

The idea behind Funko Inc and ZenaTech 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.