Correlation Between Funko and JAKKS Pacific
Can any of the company-specific risk be diversified away by investing in both Funko and JAKKS Pacific 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 JAKKS Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and JAKKS Pacific, you can compare the effects of market volatilities on Funko and JAKKS Pacific 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 JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and JAKKS Pacific.
Diversification Opportunities for Funko and JAKKS Pacific
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Funko and JAKKS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific 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 JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of Funko i.e., Funko and JAKKS Pacific go up and down completely randomly.
Pair Corralation between Funko and JAKKS Pacific
Given the investment horizon of 90 days Funko Inc is expected to generate 0.83 times more return on investment than JAKKS Pacific. However, Funko Inc is 1.2 times less risky than JAKKS Pacific. It trades about 0.08 of its potential returns per unit of risk. JAKKS Pacific is currently generating about -0.01 per unit of risk. If you would invest 704.00 in Funko Inc on August 27, 2024 and sell it today you would earn a total of 357.00 from holding Funko Inc or generate 50.71% 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. JAKKS Pacific
Performance |
| Timeline |
| Funko Inc |
| JAKKS Pacific |
Funko and JAKKS Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and JAKKS Pacific
The main advantage of trading using opposite Funko and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko position performs unexpectedly, JAKKS Pacific 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 JAKKS Pacific will offset losses from the drop in JAKKS Pacific's long position.The idea behind Funko Inc and JAKKS Pacific 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.| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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