Correlation Between Funko and Shimano
Can any of the company-specific risk be diversified away by investing in both Funko and Shimano 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 Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Shimano Inc ADR, you can compare the effects of market volatilities on Funko and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Shimano.
Diversification Opportunities for Funko and Shimano
Good diversification
The 3 months correlation between Funko and Shimano is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Shimano Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano Inc ADR 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano Inc ADR has no effect on the direction of Funko i.e., Funko and Shimano go up and down completely randomly.
Pair Corralation between Funko and Shimano
Given the investment horizon of 90 days Funko Inc is expected to under-perform the Shimano. In addition to that, Funko is 1.67 times more volatile than Shimano Inc ADR. It trades about -0.2 of its total potential returns per unit of risk. Shimano Inc ADR is currently generating about -0.33 per unit of volatility. If you would invest 1,522 in Shimano Inc ADR on August 24, 2024 and sell it today you would lose (197.00) from holding Shimano Inc ADR or give up 12.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Shimano Inc ADR
Performance |
| Timeline |
| Funko Inc |
| Shimano Inc ADR |
Funko and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Shimano
The main advantage of trading using opposite Funko and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| Funko vs. Vista Outdoor | Funko vs. Six Flags Entertainment | Funko vs. Canlan Ice Sports | Funko vs. OneSpaWorld Holdings |
| Shimano vs. Small Cap Core | Shimano vs. Freedom Holding Corp | Shimano vs. Gfl Environmental Holdings | Shimano vs. Growth Fund Of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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