Correlation Between Funko and Upbound
Can any of the company-specific risk be diversified away by investing in both Funko and Upbound 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 Upbound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Upbound Group, you can compare the effects of market volatilities on Funko and Upbound 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 Upbound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Upbound.
Diversification Opportunities for Funko and Upbound
Pay attention - limited upside
The 3 months correlation between Funko and Upbound is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group 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 Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of Funko i.e., Funko and Upbound go up and down completely randomly.
Pair Corralation between Funko and Upbound
Given the investment horizon of 90 days Funko Inc is expected to generate 0.95 times more return on investment than Upbound. However, Funko Inc is 1.05 times less risky than Upbound. It trades about -0.09 of its potential returns per unit of risk. Upbound Group is currently generating about -0.24 per unit of risk. If you would invest 1,345 in Funko Inc on November 28, 2024 and sell it today you would lose (58.00) from holding Funko Inc or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Upbound Group
Performance |
| Timeline |
| Funko Inc |
| Upbound Group |
Funko and Upbound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Upbound
The main advantage of trading using opposite Funko and Upbound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko position performs unexpectedly, Upbound 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 Upbound will offset losses from the drop in Upbound's long position.The idea behind Funko Inc and Upbound Group 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.| Upbound vs. JBG SMITH Properties | Upbound vs. Lincoln Electric Holdings | Upbound vs. Toro Co | Upbound vs. Rocky 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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