Correlation Between Funko and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Funko and Biglari Holdings 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 Funko and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Biglari Holdings, you can compare the effects of market volatilities on Funko and Biglari Holdings 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 Funko with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Biglari Holdings.
Diversification Opportunities for Funko and Biglari Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Funko and Biglari is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Funko 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 Funko Inc are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Funko i.e., Funko and Biglari Holdings go up and down completely randomly.
Pair Corralation between Funko and Biglari Holdings
Given the investment horizon of 90 days Funko is expected to generate 13.5 times less return on investment than Biglari Holdings. But when comparing it to its historical volatility, Funko Inc is 1.07 times less risky than Biglari Holdings. It trades about 0.04 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 17,453 in Biglari Holdings on September 12, 2024 and sell it today you would earn a total of 5,407 from holding Biglari Holdings or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Biglari Holdings
Performance |
| Timeline |
| Funko Inc |
| Biglari Holdings |
Funko and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Biglari Holdings
The main advantage of trading using opposite Funko and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.The idea behind Funko Inc and Biglari Holdings 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.| Biglari Holdings vs. Noble Romans | Biglari Holdings vs. Good Times Restaurants | Biglari Holdings vs. Flanigans Enterprises | Biglari Holdings vs. FAT Brands |
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 CEOs Directory module to screen CEOs from public companies around the world.
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