Correlation Between Mynaric AG and Applied Opt
Can any of the company-specific risk be diversified away by investing in both Mynaric AG and Applied Opt 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 Mynaric AG and Applied Opt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mynaric AG ADR and Applied Opt, you can compare the effects of market volatilities on Mynaric AG and Applied Opt 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 Mynaric AG with a short position of Applied Opt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mynaric AG and Applied Opt.
Diversification Opportunities for Mynaric AG and Applied Opt
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mynaric and Applied is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and Applied Opt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Opt and Mynaric AG 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 Mynaric AG ADR are associated (or correlated) with Applied Opt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Opt has no effect on the direction of Mynaric AG i.e., Mynaric AG and Applied Opt go up and down completely randomly.
Pair Corralation between Mynaric AG and Applied Opt
Given the investment horizon of 90 days Mynaric AG is expected to generate 6.75 times less return on investment than Applied Opt. But when comparing it to its historical volatility, Mynaric AG ADR is 2.74 times less risky than Applied Opt. It trades about 0.15 of its potential returns per unit of risk. Applied Opt is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Applied Opt on August 28, 2024 and sell it today you would earn a total of 2,131 from holding Applied Opt or generate 128.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mynaric AG ADR vs. Applied Opt
Performance |
| Timeline |
| Mynaric AG ADR |
| Applied Opt |
Mynaric AG and Applied Opt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mynaric AG and Applied Opt
The main advantage of trading using opposite Mynaric AG and Applied Opt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mynaric AG position performs unexpectedly, Applied Opt 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 Applied Opt will offset losses from the drop in Applied Opt's long position.| Mynaric AG vs. Comtech Telecommunications Corp | Mynaric AG vs. KVH Industries | Mynaric AG vs. Silicom | Mynaric AG vs. Knowles Cor |
| Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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