Correlation Between Mynaric AG and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Mynaric AG and BK Technologies 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 BK Technologies 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 BK Technologies, you can compare the effects of market volatilities on Mynaric AG and BK Technologies 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 BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mynaric AG and BK Technologies.
Diversification Opportunities for Mynaric AG and BK Technologies
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mynaric and BKTI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies 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 BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Mynaric AG i.e., Mynaric AG and BK Technologies go up and down completely randomly.
Pair Corralation between Mynaric AG and BK Technologies
Given the investment horizon of 90 days Mynaric AG is expected to generate 1.42 times less return on investment than BK Technologies. In addition to that, Mynaric AG is 1.09 times more volatile than BK Technologies. It trades about 0.15 of its total potential returns per unit of risk. BK Technologies is currently generating about 0.23 per unit of volatility. If you would invest 2,750 in BK Technologies on August 31, 2024 and sell it today you would earn a total of 597.00 from holding BK Technologies or generate 21.71% 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. BK Technologies
Performance |
| Timeline |
| Mynaric AG ADR |
| BK Technologies |
Mynaric AG and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mynaric AG and BK Technologies
The main advantage of trading using opposite Mynaric AG and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mynaric AG position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| Mynaric AG vs. Comtech Telecommunications Corp | Mynaric AG vs. KVH Industries | Mynaric AG vs. Silicom | Mynaric AG vs. Knowles Cor |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Baylin Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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