Correlation Between Funko and Bank of New York
Can any of the company-specific risk be diversified away by investing in both Funko and Bank of New York 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 Bank of New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Bank of New, you can compare the effects of market volatilities on Funko and Bank of New York 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 Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Bank of New York.
Diversification Opportunities for Funko and Bank of New York
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Funko and Bank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Bank of New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York 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 Bank of New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York has no effect on the direction of Funko i.e., Funko and Bank of New York go up and down completely randomly.
Pair Corralation between Funko and Bank of New York
Given the investment horizon of 90 days Funko is expected to generate 1.43 times less return on investment than Bank of New York. In addition to that, Funko is 2.81 times more volatile than Bank of New. It trades about 0.03 of its total potential returns per unit of risk. Bank of New is currently generating about 0.11 per unit of volatility. If you would invest 4,213 in Bank of New on September 4, 2024 and sell it today you would earn a total of 3,898 from holding Bank of New or generate 92.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Bank of New
Performance |
| Timeline |
| Funko Inc |
| Bank of New York |
Funko and Bank of New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Bank of New York
The main advantage of trading using opposite Funko and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko position performs unexpectedly, Bank of New York 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 Bank of New York will offset losses from the drop in Bank of New York's long position.The idea behind Funko Inc and Bank of New 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.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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