Correlation Between Allegiant Travel and Funko
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel 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 Allegiant Travel and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Funko Inc, you can compare the effects of market volatilities on Allegiant Travel 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 Allegiant Travel with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Funko.
Diversification Opportunities for Allegiant Travel and Funko
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegiant and Funko is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Allegiant Travel 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 Allegiant Travel 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 Allegiant Travel i.e., Allegiant Travel and Funko go up and down completely randomly.
Pair Corralation between Allegiant Travel and Funko
Given the investment horizon of 90 days Allegiant Travel is expected to generate 1.18 times more return on investment than Funko. However, Allegiant Travel is 1.18 times more volatile than Funko Inc. It trades about 0.23 of its potential returns per unit of risk. Funko Inc is currently generating about 0.04 per unit of risk. If you would invest 7,483 in Allegiant Travel on September 12, 2024 and sell it today you would earn a total of 1,187 from holding Allegiant Travel or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegiant Travel vs. Funko Inc
Performance |
| Timeline |
| Allegiant Travel |
| Funko Inc |
Allegiant Travel and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Funko
The main advantage of trading using opposite Allegiant Travel and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel 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.| Allegiant Travel vs. Volaris | Allegiant Travel vs. flyExclusive, | Allegiant Travel vs. Alaska Air Group | Allegiant Travel vs. Copa Holdings SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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