Correlation Between Abercrombie Fitch and Funko

Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch 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 Abercrombie Fitch and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abercrombie Fitch and Funko Inc, you can compare the effects of market volatilities on Abercrombie Fitch 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 Abercrombie Fitch with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Funko.

Diversification Opportunities for Abercrombie Fitch and Funko

0.1

Correlation Coefficient

Abercrombie Fitch  Funko

Average diversification

The 3 months correlation between Abercrombie and Funko is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and Abercrombie Fitch 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 Abercrombie Fitch 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 Abercrombie Fitch i.e., Abercrombie Fitch and Funko go up and down completely randomly.

Pair Corralation between Abercrombie Fitch and Funko

Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 0.5 times more return on investment than Funko. However, Abercrombie Fitch is 1.99 times less risky than Funko. It trades about 0.17 of its potential returns per unit of risk. Funko Inc is currently generating about 0.01 per unit of risk. If you would invest  6,967  in Abercrombie Fitch on May 7, 2025 and sell it today you would earn a total of  2,944  from holding Abercrombie Fitch or generate 42.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Abercrombie Fitch  vs.  Funko Inc

Abercrombie Fitch

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abercrombie Fitch are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Abercrombie Fitch reported solid returns over the last few months and may actually be approaching a breakup point.

Funko Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Funko Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Funko is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Abercrombie Fitch and Funko

The main advantage of trading using opposite Abercrombie Fitch and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch 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.

The idea behind Abercrombie Fitch and Funko Inc 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.