Correlation Between 1StdibsCom and Funko

Can any of the company-specific risk be diversified away by investing in both 1StdibsCom 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 1StdibsCom and Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1StdibsCom and Funko Inc, you can compare the effects of market volatilities on 1StdibsCom 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 1StdibsCom with a short position of Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and Funko.

Diversification Opportunities for 1StdibsCom and Funko

0.92

Correlation Coefficient

1StdibsCom  Funko

Almost no diversification

The 3 months correlation between 1StdibsCom and Funko is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc and 1StdibsCom 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 1StdibsCom 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 1StdibsCom i.e., 1StdibsCom and Funko go up and down completely randomly.

Pair Corralation between 1StdibsCom and Funko

Given the investment horizon of 90 days 1StdibsCom is expected to generate 0.55 times more return on investment than Funko. However, 1StdibsCom is 1.82 times less risky than Funko. It trades about -0.2 of its potential returns per unit of risk. Funko Inc is currently generating about -0.31 per unit of risk. If you would invest  357.00  in 1StdibsCom on January 12, 2025 and sell it today you would lose (115.00) from holding 1StdibsCom or give up 32.21% of portfolio value over 90 days.

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

1StdibsCom  vs.  Funko Inc

1StdibsCom

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1StdibsCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with 1StdibsCom and Funko

The main advantage of trading using opposite 1StdibsCom and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom 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 1StdibsCom 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.