Correlation Between Ciena Corp and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Ciena Corp 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 Ciena Corp and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Mynaric AG ADR, you can compare the effects of market volatilities on Ciena Corp 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 Ciena Corp with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Mynaric AG.
Diversification Opportunities for Ciena Corp and Mynaric AG
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ciena and Mynaric is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp 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 Ciena Corp 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 Ciena Corp 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 Ciena Corp i.e., Ciena Corp and Mynaric AG go up and down completely randomly.
Pair Corralation between Ciena Corp and Mynaric AG
Given the investment horizon of 90 days Ciena Corp is expected to generate 0.39 times more return on investment than Mynaric AG. However, Ciena Corp is 2.6 times less risky than Mynaric AG. It trades about -0.01 of its potential returns per unit of risk. Mynaric AG ADR is currently generating about -0.09 per unit of risk. If you would invest 8,481 in Ciena Corp on November 1, 2024 and sell it today you would lose (345.00) from holding Ciena Corp or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciena Corp vs. Mynaric AG ADR
Performance |
| Timeline |
| Ciena Corp |
| Mynaric AG ADR |
Ciena Corp and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Mynaric AG
The main advantage of trading using opposite Ciena Corp and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp 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.| Ciena Corp vs. Comtech Telecommunications Corp | Ciena Corp vs. KVH Industries | Ciena Corp vs. Silicom | Ciena Corp vs. Knowles Cor |
| Mynaric AG vs. Comtech Telecommunications Corp | Mynaric AG vs. KVH Industries | Mynaric AG vs. Silicom | Mynaric AG vs. Knowles Cor |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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