Correlation Between Penske Automotive and Funko
Can any of the company-specific risk be diversified away by investing in both Penske Automotive and Funko 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 Penske Automotive and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penske Automotive Group and Funko Inc, you can compare the effects of market volatilities on Penske Automotive and Funko 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 Penske Automotive with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penske Automotive and Funko.
Diversification Opportunities for Penske Automotive and Funko
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penske and Funko is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Penske Automotive Group and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Penske Automotive 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 Penske Automotive Group are associated (or correlated) with Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Penske Automotive i.e., Penske Automotive and Funko go up and down completely randomly.
Pair Corralation between Penske Automotive and Funko
Considering the 90-day investment horizon Penske Automotive Group is expected to generate 0.46 times more return on investment than Funko. However, Penske Automotive Group is 2.19 times less risky than Funko. It trades about 0.26 of its potential returns per unit of risk. Funko Inc is currently generating about -0.13 per unit of risk. If you would invest 15,114 in Penske Automotive Group on August 26, 2024 and sell it today you would earn a total of 1,294 from holding Penske Automotive Group or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penske Automotive Group vs. Funko Inc
Performance |
| Timeline |
| Penske Automotive |
| Funko Inc |
Penske Automotive and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penske Automotive and Funko
The main advantage of trading using opposite Penske Automotive and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penske Automotive position performs unexpectedly, Funko 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 Funko will offset losses from the drop in Funko's long position.| Penske Automotive vs. Kingsway Financial Services | Penske Automotive vs. KAR Auction Services | Penske Automotive vs. Cango Inc | Penske Automotive vs. Vroom Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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