Correlation Between American Outdoor and Funko
Can any of the company-specific risk be diversified away by investing in both American Outdoor 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 American Outdoor and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Outdoor Brands and Funko Inc, you can compare the effects of market volatilities on American Outdoor 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 American Outdoor with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Outdoor and Funko.
Diversification Opportunities for American Outdoor and Funko
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Funko is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Outdoor Brands and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and American Outdoor 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 American Outdoor Brands 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 American Outdoor i.e., American Outdoor and Funko go up and down completely randomly.
Pair Corralation between American Outdoor and Funko
Given the investment horizon of 90 days American Outdoor is expected to generate 1.55 times less return on investment than Funko. But when comparing it to its historical volatility, American Outdoor Brands is 1.14 times less risky than Funko. It trades about 0.05 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 1,047 in Funko Inc on August 30, 2024 and sell it today you would earn a total of 102.00 from holding Funko Inc or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Outdoor Brands vs. Funko Inc
Performance |
| Timeline |
| American Outdoor Brands |
| Funko Inc |
American Outdoor and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Outdoor and Funko
The main advantage of trading using opposite American Outdoor and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Outdoor 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.| American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |