Correlation Between Forsys Metals and Funko

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

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

Diversification Opportunities for Forsys Metals and Funko

0.15

Correlation Coefficient

Forsys Metals  Funko

Average diversification

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

Pair Corralation between Forsys Metals and Funko

Assuming the 90 days horizon Forsys Metals Corp is expected to under-perform the Funko. In addition to that, Forsys Metals is 1.55 times more volatile than Funko Inc. It trades about -0.1 of its total potential returns per unit of risk. Funko Inc is currently generating about 0.06 per unit of volatility. 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

Forsys Metals Corp  vs.  Funko Inc

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.

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.

Pair Trading with Forsys Metals and Funko

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

The idea behind Forsys Metals Corp and Funko Inc 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.