Correlation Between Digi International and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Mynaric AG ADR, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Mynaric AG.
Diversification Opportunities for Digi International and Mynaric AG
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Digi and Mynaric is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Digi International 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 Digi International 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 Digi International 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 Digi International i.e., Digi International and Mynaric AG go up and down completely randomly.
Pair Corralation between Digi International and Mynaric AG
Given the investment horizon of 90 days Digi International is expected to under-perform the Mynaric AG. But the stock apears to be less risky and, when comparing its historical volatility, Digi International is 9.11 times less risky than Mynaric AG. The stock trades about -0.14 of its potential returns per unit of risk. The Mynaric AG ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Mynaric AG ADR on October 20, 2024 and sell it today you would earn a total of 5.00 from holding Mynaric AG ADR or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Mynaric AG ADR
Performance |
| Timeline |
| Digi International |
| Mynaric AG ADR |
Digi International and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Mynaric AG
The main advantage of trading using opposite Digi International and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |