Correlation Between Air Lease and Funko
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Funko Inc, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Funko.
Diversification Opportunities for Air Lease and Funko
Very good diversification
The 3 months correlation between Air and Funko is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Funko go up and down completely randomly.
Pair Corralation between Air Lease and Funko
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.03 times less return on investment than Funko. But when comparing it to its historical volatility, Air Lease is 1.8 times less risky than Funko. It trades about 0.1 of its potential returns per unit of risk. Funko Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Funko Inc
Performance |
| Timeline |
| Air Lease |
| Funko Inc |
Air Lease and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Funko
The main advantage of trading using opposite Air Lease and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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 Air Lease 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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