Correlation Between Cornish Metals and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Mynaric AG, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Mynaric AG.
Diversification Opportunities for Cornish Metals and Mynaric AG
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cornish and Mynaric is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Mynaric AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mynaric AG and Cornish Metals 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 Cornish Metals 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 has no effect on the direction of Cornish Metals i.e., Cornish Metals and Mynaric AG go up and down completely randomly.
Pair Corralation between Cornish Metals and Mynaric AG
Assuming the 90 days trading horizon Cornish Metals is expected to generate 0.24 times more return on investment than Mynaric AG. However, Cornish Metals is 4.09 times less risky than Mynaric AG. It trades about 0.13 of its potential returns per unit of risk. Mynaric AG is currently generating about -0.18 per unit of risk. If you would invest 760.00 in Cornish Metals on September 13, 2024 and sell it today you would earn a total of 75.00 from holding Cornish Metals or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cornish Metals vs. Mynaric AG
Performance |
| Timeline |
| Cornish Metals |
| Mynaric AG |
Cornish Metals and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Mynaric AG
The main advantage of trading using opposite Cornish Metals and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Prudential Financial | Cornish Metals vs. Cincinnati Financial Corp | Cornish Metals vs. Bank of Ireland | Cornish Metals vs. Ameriprise Financial |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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