Correlation Between Yuexiu Transport and Funko

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

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

Diversification Opportunities for Yuexiu Transport and Funko

-0.59

Correlation Coefficient

Yuexiu Transport  Funko

Excellent diversification

The 3 months correlation between Yuexiu and Funko is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Yuexiu Transport 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 Yuexiu Transport Infrastructure 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 Yuexiu Transport i.e., Yuexiu Transport and Funko go up and down completely randomly.

Pair Corralation between Yuexiu Transport and Funko

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.3 times more return on investment than Funko. However, Yuexiu Transport is 1.3 times more volatile than Funko Inc. It trades about 0.13 of its potential returns per unit of risk. Funko Inc is currently generating about 0.03 per unit of risk. 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

Yuexiu Transport Infrastructur  vs.  Funko Inc

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.

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.

Pair Trading with Yuexiu Transport and Funko

The main advantage of trading using opposite Yuexiu Transport and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport 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 Yuexiu Transport Infrastructure 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 CEOs Directory module to screen CEOs from public companies around the world.