Correlation Between Aviat Networks and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and Mynaric AG 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 Aviat Networks and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and Mynaric AG ADR, you can compare the effects of market volatilities on Aviat Networks and Mynaric AG 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 Aviat Networks with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and Mynaric AG.
Diversification Opportunities for Aviat Networks and Mynaric AG
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aviat and Mynaric is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and Mynaric AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mynaric AG ADR and Aviat Networks 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 Aviat Networks are associated (or correlated) with Mynaric AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mynaric AG ADR has no effect on the direction of Aviat Networks i.e., Aviat Networks and Mynaric AG go up and down completely randomly.
Pair Corralation between Aviat Networks and Mynaric AG
Given the investment horizon of 90 days Aviat Networks is expected to generate 0.16 times more return on investment than Mynaric AG. However, Aviat Networks is 6.25 times less risky than Mynaric AG. It trades about 0.09 of its potential returns per unit of risk. Mynaric AG ADR is currently generating about -0.15 per unit of risk. If you would invest 1,808 in Aviat Networks on November 2, 2024 and sell it today you would earn a total of 61.00 from holding Aviat Networks or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. Mynaric AG ADR
Performance |
| Timeline |
| Aviat Networks |
| Mynaric AG ADR |
Aviat Networks and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and Mynaric AG
The main advantage of trading using opposite Aviat Networks and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, Mynaric AG 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 Mynaric AG will offset losses from the drop in Mynaric AG's long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Gilat Satellite Networks | Aviat Networks vs. Mynaric AG ADR |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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