Correlation Between Fox Factory and Funko
Can any of the company-specific risk be diversified away by investing in both Fox Factory 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 Fox Factory and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fox Factory Holding and Funko Inc, you can compare the effects of market volatilities on Fox Factory 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 Fox Factory with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fox Factory and Funko.
Diversification Opportunities for Fox Factory and Funko
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fox and Funko is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fox Factory Holding and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Fox Factory 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 Fox Factory Holding 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 Fox Factory i.e., Fox Factory and Funko go up and down completely randomly.
Pair Corralation between Fox Factory and Funko
Given the investment horizon of 90 days Fox Factory Holding is expected to under-perform the Funko. In addition to that, Fox Factory is 1.34 times more volatile than Funko Inc. It trades about -0.1 of its total potential returns per unit of risk. Funko Inc is currently generating about 0.09 per unit of volatility. If you would invest 717.00 in Funko Inc on February 19, 2024 and sell it today you would earn a total of 112.00 from holding Funko Inc or generate 15.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fox Factory Holding vs. Funko Inc
Performance |
Timeline |
Fox Factory Holding |
Funko Inc |
Fox Factory and Funko Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fox Factory and Funko
The main advantage of trading using opposite Fox Factory and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fox Factory 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.Fox Factory vs. Dorman Products | Fox Factory vs. Malibu Boats | Fox Factory vs. Installed Building Products | Fox Factory vs. ExlService Holdings |
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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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