Correlation Between Air Transport and Funko
Can any of the company-specific risk be diversified away by investing in both Air 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 Air Transport and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Funko Inc, you can compare the effects of market volatilities on Air 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 Air Transport with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Funko.
Diversification Opportunities for Air Transport and Funko
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Funko is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Air 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 Air Transport Services 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 Transport i.e., Air Transport and Funko go up and down completely randomly.
Pair Corralation between Air Transport and Funko
Given the investment horizon of 90 days Air Transport is expected to generate 11.39 times less return on investment than Funko. But when comparing it to its historical volatility, Air Transport Services is 1.15 times less risky than Funko. It trades about 0.0 of its potential returns per unit of risk. Funko Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,023 in Funko Inc on September 4, 2024 and sell it today you would earn a total of 160.00 from holding Funko Inc or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Funko Inc
Performance |
| Timeline |
| Air Transport Services |
| Funko Inc |
Air Transport and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Funko
The main advantage of trading using opposite Air Transport and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air 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.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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